Pet food M&A off to fast start in 2022

Three pet food deals in January 2022 serve as a microcosm of the state of pet industry mergers and acquisitions today, including branching into other segments.

Pet-food-M&A
Pet-food-M&A
By the end of January 2022, at least three pet food mergers and acquisitions had occurred, including one involving Mars Petcare.

Pet food mergers and acquisitions (M&A) increased by more than 75% in 2021 over 2020, the first year of the COVID-19 pandemic, driven by low interest rates, large amounts of capital that investors needed to use and “robust tailwinds for the pet industry,” wrote Carol Frank, managing director of BirdsEye advisory Group, on PetAge.com.

That appears to be carrying over into 2022. Through January, at least three pet food acquisitions had occurred, led Mars Petcare, the world’s largest pet food company. Through its Royal Canin division, Mars is buying Nom Nom, a fresh, direct-to-consumer (DTC) pet food brand.

That deal followed on the first of the year, with Manna Pro announcing its acquisition of Oxbow Animal Health, which provides pet foods, treats, supplements and other products for small mammals. The third deal in January 2022 involved conglomerate ADM, which supplies ingredients to the pet food industry and also owns several pet food manufacturers, completing its acquisition of Invivo Sanpo, a pet nutrition company based in China.

Of course, Mars is also part of a multinational conglomerate, with its pet care business comprising nearly 50 pet food brands. The company has been diversifying its revenue streams for several years, having previously acquired pet care technology companies, animal hospitals, veterinary clinics and similarly affiliated pet businesses. Now it is making a foray into the increasingly popular and growing fresh and DTC pet food segments.

As for Manna Pro, it was known for providing nutrition and other products for backyard chickens and similar animals. Then in 2015, it began to branch into the health and wellness market for dogs, cats and horses via acquisitions of companies in those spaces; in 2018, it entered the pet food/treats category by buying VetScience and its Fruitables brand.

Since then, Manna Pro has been on an acquisition spree: one in 2019, two in 2020 and three in 2021 (in addition to the one so far in 2022). In the midst of all this activity, Manna Pro itself was acquired by Carlyle Group, a private equity group, in November 2020.

These 2022 acquisitions to date represent many facets of the overall pet industry M&A environment: multiple deals, private equity involvement, branching into other species and segments of the pet food and pet markets. Just one month of the year serves as a microcosm of the state of pet food M&A today.

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