Graham Partners Creates Pet Food Platform BrightPet Nutrition Group, LLC

Graham Partners is now one of many private equity firms focusing on the growing industry of superior quality and healthy pet food, as evidence by its acquisition of BrightPet Nutrition Group. The BrightPet platform was formed by acquiring co-packers Ohio Pet Food and Southern Tier Pet Nutrition as well as Blackwood Pet Food. Going forward, Graham likely will seek bolt-on acquisitions to grow the USDA Certified Organic pet food and treat producer. The Company’s products currently are sold exclusively through independent retailers, but with the new investment it will be interesting to see if it begins distribution into pet super-stores or grocery aisles.

Sources:

http://www.grahampartners.net/article/bone-appetit-graham-partners-latest-investment-helps-pets-eat-healthier/

http://www.petfoodindustry.com/articles/5788-pet-food-manufacturers-combine-to-create-brightpet

http://www.grahampartners.net/portfolio/

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Quarterly Pet Industry Report – Available Now!

Industry Overview

The Pet Industry finished 2015 strong after a busy year of M&A activity fueled by favorable trends. As consumers continue “humanizing” their pets and are more concerned with ingredients and brand reputation, strategic acquirers are targeting niche brands with dedicated customer bases. The increasing demand for organic and/or eco-friendly food and products reflects greater pet health consciousness. Treating pets as members of the family drives pet owners to spend more on their animals, creating higher margins across all industry subsectors, including premium food and treats, developmental toys and advanced veterinary care.

The persisting trend of pet humanization has led to the increased presence of basic pet products in popular channels such as supermarkets, discount department stores and online retailers. According to the 2015-2016 National Pet Owners Survey, approximately 65% of U.S. households own a pet. These trends could affect…

Read full report here >

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Pet Valu Expands US Reach

The major Canadian pet retail chain, Pet Valu, completed its acquisition of Ohio-based pet retailer Jack’s Pets for an undisclosed amount this month. Pet Valu plans to invest up to $4mm to renovate and convert the Jack’s locations to align with the Pet Valu brand, including self-serve dog-washing stations. This acquisition is a major step in the Company’s strategic Midwest expansion. Pet Valu plans to expand the Jack’s branches from 32 to 100 stores. The next cities targeted for locations include Cleveland, Toledo and Pittsburgh.

Read more here: http://www.bizjournals.com/dayton/news/2015/04/03/pet-valu-to-invest-4m-in-jack-s-pets-conversion.html

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Mud Bay Owners Exit with ESOP

Mud Bay, a boutique pet retailer focused on healthy and specialty pet products, announced that current owners will be selling the Company to its employees through an Employee Stock Ownership Plan (ESOP). This alternative exit strategy will allow current co-CEOs and siblings Lars and Marisa Wulff to transfer their equity shares to the Company’s 320 employees.

The prevalence of owner exits through ESOPs has grown over recent years, with benefits including capital gains tax deferral for sellers and improved employee performance through ownership incentive. For more information regarding ESOPs click here.

To read more about Mud Bay’s ESOP, click here.

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Nestlé Purina Acquires Merrick Pet Care

Nestlé Purina acquired Merrick Pet Care, premium natural and organic dog and cat food producer, for an undisclosed amount in late July. Nestlé Purina purchased Merrick from Swander Pace Capital, which has owned Merrick since 2010. Nestlé Purina, which holds approximately 35% of US dog and cat food sales, has been heavily investing in the growth of its natural foods segment. In 2013, Nestlé Purina acquired Zuke’s, a specialty natural pet treat company based out of Colorado.

Click here to read more >

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Growth Capital: Frontenac Company’s Majority Recapitalization of Cloud Star

Date: July 15, 2014

Buyer: Frontenac Company

Seller: Cloud Star Corporation

Price: undisclosed

Terms: Majority Recapitalization

Frontenac Company, a leading private investment firm focused on investing in lower middle market, family held or owner operated businesses, today announced that it has completed the majority recapitalization of Cloud Star Corporation to support the growth plans of this producer of natural and wholesome pet products. Financial terms of the private transaction were not disclosed.

Cloud Star Corporation, located in San Luis Obispo, California, has been dishing up their products to canine and feline connoisseurs since 1999. Their extensive product line includes a wide variety of wholesome and natural treats for dogs and cats, grooming products, and “Wag More Bark Less” merchandise. Simple, easy to read, ingredient statements resonate with pet parents and thrill dogs and cats with even the most finicky palate or sensitive skin. Cloud Star’s treats for dogs and cats are made with the same types of ingredients used in human food, and are suitable for dogs and cats with allergies. The company produces treats free of corn, soy, artificial colors, artificial flavors, byproducts, and preservatives. As part of Cloud Star’s commitment to giving back, the company donates to non-profit organizations benefiting animals, women, children, and the environment.

Frontenac Company is a leading private investment firm focused on investing in lower middle market buyout transactions in the business services, industrial, food and healthcare sectors. Frontenac works in partnership with proven operating leaders, through our executive-centric approach called CEO1ST®, to identify, acquire, and build market leading companies through transformational acquisitions and operational excellence. The firm has built a leading franchise working with the owners of mid-sized businesses, almost always families or founders, as they address complex transition issues of liquidity, management enhancement, and growth planning. Based in Chicago, Frontenac has completed over 25 buyout transactions, and nearly 60 add-on acquisitions, since 2000.

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Mergers & Acquisitions: Cat-Sip Real Milk Treats Acquired by PET-AG, Inc.

Date: July 1, 2014

Buyer: PET-AG, Inc.

Seller: Cat-Sip Real Milk Treats for Pets

Price: Undisclosed

Terms: Acquisition

PET-AG, Inc.,  a leading pet product development and manufacturing company, acquired Cat-Sip Real Milk Treats for Pets, developed by AK Pharma, inc.

Cat-Sip is a first-of-its-kind real dairy product that offers the great taste and wholesome benefits of milk without the potential lactose-related digestive issues.

With the purchase of Cat-Sip, PET-AG is able to expand its milk based nutritional product portfolio offered by PET-AG, Inc. As they continue to develop and build the PET-AG WELL ANIMAL GROUP portfolio, their goal is to remain committed to incorporating and developing more high-quality products, like Cat-Sip, to support animals throughout every life stage.

To read more about the transaction please click here

 

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Mergers & Acquisitions: Global Harvest Foods Acquires Scotts Miracle-Gro’s U.S. wild bird food business

Date: April 30, 2014

Buyer: Global Harvest Foods

Seller: Scotts Miracle-Gro’s U.S. wild bird food business

Price: Undisclosed

Terms: Acquisition

Global Harvest Foods, a manufacturer of wild and caged bird food and small critter feed, acquired Scotts Miracle-Gro’s U.S. wild bird food business. The acquisition includes Songbird Selections, Morning Song and Country Pride brands.

This acquisition expands Global Harvest’s production capabilities into key market areas that represent a significant portion of the U.S. market.  The company will acquire the Scotts bird seed manufacturing plant in Reynolds, Ind., and will continue production in Doland, S.D., and Uvalde, Texas. 

Global Harvest currently operates from eight facilities nationwide, and the addition of these manufacturing plants supplements Global Harvest’s national footprint, giving the company new regional service capabilities that benefits retailers with lower ingredient and reduced freight costs, quicker fulfillment times and increased inventory turnover.

 

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Mergers & Acquisitions: Eli Lilly Acquires Novartis Animal Health

Date: April 22, 2014

Buyer: Eli Lilly

Seller: Novartis Animal Health

Price: $5.4 Billion

Terms: Acquisition

On April 22nd Novartis Animal Health was sold to Eli Lilly. Eli Lilly  purchased Novartis Animal Health for a whopping $5.4B in cash, which is the second-largest deal in the company’s history.  The acquisition will diversify Lilly’s existing animal health business by folding the $1.1-billion-in-revenue Novartis Animal Health into its Greenfield-based Elanco division, making it the world’s second-largest animal health company by revenue.  Novartis will greatly expand and complement Elanco’s product portfolio, R&D and manufacturing capabilities, and commercial presence in key geographies.

“Animal health continues to represent an attractive growth opportunity for Lilly. We intend to keep Elanco and to take advantage of the substantial synergies between our animal health and human health businesses,” Eli Lilly CEO John Lechleiter said in a prepared statement.

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Mergers & Acquisitions: Mars Inc. Acquires Iams, Eukanuba, and Natura brands from P&G

Date: April 10, 2014

Buyer: Mars Inc.

Seller: Iams, Eukanuba, and Natura brands

Price: $2.9 Billion

Type: Acquisition

On April 10th Mars purchased Iams, Eukanuba, and Natura brands from Procter & Gamble for a total of $2.9B. The transaction is expected to be fully completed during the second half of 2014. The global president of Mars Petcare, Todd Lachman, believes the acquisition is very strategic and a perfect fit with Mars Petcare’s vision of making “a better world for pets.” This acquisition further expands the Mars’ billion-dollar pet care division, which already includes Banfield Pet Hospitals, Royal Canin, Pedigree and Whiskas.  The acquisition gives Mars Petcare approximately 80 percent of P&G Pet Care’s global sales.

Procter & Gamble’s President and CEO, A.G. Lafley, believes exiting pet care will allow P&G to focus on the core businesses that will create the most value for consumers and shareholders.

 

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