Mad Paws Faces Court Approval Hurdle as Rover Acquisition Nears Completion

Strong Marketplace Performance

Mad Paws Holdings Limited (ASX – MPA), Australia's leading online pet services platform, has delivered a solid September quarter, with marketplace operating revenue climbing 14% year-on-year to $2.3 million. This growth was driven by an 8% increase in bookings, supported by a 6% rise in new customers and a 9% increase in repeat bookings. Notably, customers are engaging more deeply, booking longer service durations, which contributed to a 4% increase in average time units per booking.

The company’s marketplace cash EBITDA also improved by 17% to $1.0 million, reflecting a healthy 42% margin. These results underscore Mad Paws’ ability to scale its core business efficiently despite undergoing significant strategic changes.

Operational Enhancements and Technology Investments

Mad Paws has leveraged automation and artificial intelligence to boost operational efficiency and customer experience. The integration of Score.ai, an AI-driven quality assurance tool, alongside Freshdesk automation flows, has streamlined workflows such as user management and sitter verification. These improvements have accelerated response times and enhanced service scalability.

On the technology front, the company rebuilt its search infrastructure and simplified the customer journey across desktop and mobile platforms. These upgrades are designed to support ongoing product innovation and accommodate growing traffic, positioning Mad Paws for sustained marketplace expansion.

Strategic Divestments and Corporate Developments

During the quarter, Mad Paws completed the divestment of its Pet Chemist business to VetPartners Australia Pty Ltd for approximately $13 million in cash, net of adjustments. This move aligns with the company’s strategic focus on its marketplace operations, as Rover Group’s proposed acquisition targets this segment exclusively.

Additionally, Mad Paws has wound down its remaining e-commerce assets under the Sash and Waggly brands, further streamlining its business. Proceeds from the Pet Chemist sale were used to fully repay the company’s debt facility with Partners for Growth VII, L.P., strengthening its balance sheet.

Progress on Rover Acquisition Scheme

Mad Paws shareholders voted in favor of the scheme of arrangement with Rover Group on 24 October 2025. The scheme, which values Mad Paws at approximately $62 million including the Pet Chemist proceeds, remains subject to court approval and other conditions precedent. If approved, the scheme will see Mad Paws shares suspended from trading on 3 November 2025, with scheme consideration of $0.14 per share payable on 11 November 2025.

This transaction marks a significant milestone for Mad Paws, potentially delivering immediate value to shareholders while enabling the company’s marketplace business to integrate with a global pet services leader.

Financial Position and Outlook

Despite an operating cash outflow of $1.2 million reflecting scheme implementation and divestment costs, Mad Paws ended the quarter with a strong cash position of $11.5 million, providing an estimated 9.25 quarters of funding. The group reported a positive cash EBITDA of $0.2 million, improving on break-even in the prior corresponding period, driven by marketplace growth and reduced corporate overheads.

Looking ahead, the company’s focus will be on completing the acquisition process, maintaining marketplace momentum, and leveraging its enhanced technology platform to drive customer engagement and retention.