Dane Creek Capital Corp., a pet industry merchant bank, announced it has acquired Spring Meadows Natural Pet Food, a manufacturer of frozen raw pet food for dogs and cats, in a press release. Spring Meadows is located in Saskatoon, Saskatchewan, Canada and sells its products via pet specialty retailers mainly in western Canada.
The purchase price represents 0.72 times trailing 12-months revenue. The purchase is an all cash transaction. No other terms were announced.
Founded in 2004 by farmers Brett Flahr and Regan Sloboshan, Spring Meadows recipes feature high quality whole ground animal, including meat, organ and bone, sourced predominantly through local farmers.
Flahr will continue on as President of Spring Meadows reporting to Mark Murakami, President of United Raw Pet Foods Inc., a subsidiary majority owned by DCCC.
Spring Meadows Natural Pet Food product line includes pure protein-ingredient meals with beef, chicken, fish, turkey, lamb, rabbit, and bison as well as mixed meals with added fruits and vegetables. Spring Meadows pet foods come in a variety of package sizes including bulk options and are prepared using a fine grind so as to appeal to owners of small dogs and cats as well as larger dogs.
Traceability is a core feature of Spring Meadows’ raw meals which originally used meat from livestock raised by the founders. As demand outstripped supply, Flahr and his partner were able to leverage their relationships with local farms to sustain their ‘farm-to-bowl’ philosophy.
DCCC believes traceability and vertical integration in the raw food category will become of increasing importance as blockchain technology reaches the pet food world. Dane has already begun moving towards applying blockchain to its pet consumables businesses, including its four core raw pet foods brands, three dehydrated treats brands, and Baie Run supplements brand. DCCC believes pet specialty retailers and pet owners will increasingly demand transparency in all the products they feed their pets and blockchain technology will give the company a significant competitive advantage over others in the industry.
The acquisition of Spring Meadows marks DCCC’s fourth acquisition of a Canadian raw pet food manufacturer in the last 12 months. In Q4-2017, DCCC acquired Mountain Dog Enterprises Inc. of Edmonton, Alberta; in Q1-2018, the Company acquired both Pets4Life and Naturawls Pet Products based in St. Thomas, Ontario.
With the addition of Spring Meadows, DCCC now has manufacturing capability in three provinces. The Company believes more and more pet owners are moving their dogs and cats to a raw diet making it the fastest growing segment in the pet food industry.
While cat trends continue, the pandemic has added to overall slow-growth treatment of the cat food market.
Premiumization and humanization, as well as automation, fueled continued operation growth in spite of the COVID-19 pandemic.