ADM acquiring 75% of P4 private label pet treats, supplements

Learn more about this transaction that values the four enterprises in their entirety at approximately US$600 million, and ADM will acquire 75% of the equity.

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Adapted from a press release:

ADM, provider of pet, livestock and human food ingredients, reached an agreement to acquire a 75% ownership stake in private label pet treats and supplements maker P4, made up of PetDine, Pedigree Ovens, The Pound Bakery and NutraDine. The transaction values the four enterprises in their entirety at approximately US$600 million, and ADM will acquire 75% of the equity, subject to customary adjustments.

With more than 300 employees, P4 Companies provides a range of customized pet treat and supplement products to more than 650 customers in 15 countries. Their offerings include baked treats, semi‐moist treats, long goods, blends, unique proteins, soft chews, liquids and powders, many of which are developed to meet the demand for clean labels. P4 has delivered strong revenue and profit growth in recent years, according to the company, and has invested in new product lines as well as expanded its production capacity.

ADM will also acquire P4’s 300,000+ square feet of production and innovation facilities in Illinois and Colorado. In addition, the agreement includes a put/call option under which the parties could agree for ADM to purchase the remaining 25 percent at an agreed‐upon market price in the coming years.

Executive statements on acquisition

“We’re continuing to advance our growth strategy and transform our company with targeted investments that expand our capabilities in large, high‐growth segments, including pet nutrition – a key focus of our growing animal nutrition business,” said Vince Macciocchi, president of ADM’s nutrition business. “Annual global sales of pet food total US$110 billion, forecast to grow to US$140 billion by 2026 – with pet treats an even faster‐growing category. We’ve grown to meet that demand, from the construction of new production facilities, to the additions of pet treat and food provider Crosswind and Neovia’s global pet nutrition business, to the opening of our industry‐leading Animal Nutrition Technology Center in Decatur. Now, we’re taking the next step in our strategic journey with a majority investment in P4. We’re excited by this agreement, which we expect to exceed our hurdle rates and financial return targets as we partner with an innovative, high‐growth business with a great track record of working closely with customers around the globe to develop and produce best‐in‐class pet products.”

“As a group, our companies PetDine, Pedigree Ovens and The Pound Bakery, have become clear leaders in the pet supplement and treat space,” said Preston Munsch, CEO, PetDine. “Through innovation, R&D and manufacturing expertise, we have become important strategic partners to brands around the world. Through this new and exciting partnership with ADM, we will be able to advance our customers’ lead positions in the pet industry even further. Through their extensive list of ingredients combined with their Animal Nutrition Technology Center and worldwide resources, we are excited to merge our knowledge and expertise to continue to be innovative leaders in the pet industry.”

“ADM’s global resources — from ingredient supply chain, transportation and their emerging pet nutrition platform — are what we were looking for in a partner,” said Kurt Stricker, owner, Pedigree Ovens. “We are excited to continue our strong growth path together.”
“Joining the ADM family gives us the ability to elevate and expand our product offerings to our customers and continue to support their ideas and growth,” said Lexie Berglund, president, The Pound Bakery. Like ADM, P4 has shown a strong commitment to sustainable practices; in 2020, they announced that their Harvard, Illinois, production facility was now powered with solar power, with the capacity to offset almost 1,500 tons of
greenhouse gas emissions annually.

“Two years ago, ADM identified the humanization of pets – owners who want to provide their companion animals with the same kind of clean, simple, healthy products they eat themselves – as an important growth trend,” Macciocchi continued. “This partnership positions ADM perfectly to continue to meet those needs. We’re excited to partner with the great P4 team, and we look forward to collaborating with them to combine their best‐in‐class customized solutions with ADM’s extensive pantry of ingredients, natural colors, and flavors; application development expertise; rapid prototyping and innovation capabilities; and global go‐to‐market footprint.”

The proposed transaction is subject to regulatory approvals, and is expected to be completed in the coming weeks.

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