On April 26, international private equity firm, Cinven, announced that it has signed an agreement to acquire Partner in Pet Food (PPF), a European pet food manufacturer, for an undisclosed amount. This acquisition adds to the more that one dozen mergers or acquisitions in the pet food industry in 2018.

“The European pet food market is one of the most attractive spaces in the wider consumer sector,” said Matteo Corà, senior principal at Cinven, in a press release. “PPF is a highly successful business with further opportunities for growth organically, leveraging its production capabilities and track record for product innovation, and through acquisition.”

Headquartered in Hungary, PPF is a pet food manufacturer with nine manufacturing operations across Europe. PPF supplies pet food to more than 250 customers in Europe, including traditional retailers, discounters, specialty pet retailers and online specialists. Its product range covers the main categories of dog and cat food including wet and dry food including single serve products.  Established in 1999, the company employs more than 1,400 people and produces more than 450,000 tons of pet food per annum, distributed across 38 countries in Europe.

“We now have an opportunity to grow the business further and are delighted to partner with the team at Cinven to drive further organic growth, as well as focus on buy and build opportunities, in order to offer new products and reach a wider range of customers,” said Attila Balogh, chairman and CEO of PPF, in a press release.

Opportunities from PPF acquisition in the EU pet food industry

Cinven’s consumer team identified PPF as an attractive investment opportunity given:

• Pet food represents a large and resilient market, with growth underpinned by long-term trends such as the rise in pet ownership; owners buying specialist pet food; and a shift towards more premium products.
• The EUR23 billion European pet food market is forecast to continue growing at a sustained pace over the coming years;
• PPF is a market-leading player with well-invested, pan-European production capabilities and a strong reputation for quality, reliability and innovation;
• Attractive growth opportunities exist for PPF across its core markets throughout Europe, working together with its retail partners to deliver innovative and quality products across offline and online channels;
• PPF has a proven track record of strong financial performance and cash-flow generation through the economic cycle, and dynamic revenue growth over the past five years; 
• A fragmented European market for pet food manufacturers represents an opportunity for PPF to participate in consolidation and capitalize on Cinven’s strong buy and build expertise, building on PPF’s existing operations; and
• The business is managed by an exceptional team, led by Chairman and CEO Attila Balogh, together with his team, since 2009.