private label pet food

Arbor Closes Mars Deal, Launches Red Collar Pet

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Arbor Investments has completed the acquisition of Mars Petcare’s US-based private label pet food products business (Exclusive Brands or EB).

The Exclusive Brands business manufactures private label pet food and treat products for national retail customers and includes five manufacturing facilities in South Carolina, Ohio, Oklahoma (2) and California. With the Exclusive Brands acquisition now closed, the business has been re-launched as Red Collar Pet Foods with a headquarters in Franklin, TN (www.redcollarpet.com).

The senior management team of Red Collar is composed of CEO and President Chris Hamilton, COO Dan Baker, CFO and CIO Marc Simkin, and SVP of Sales and Product Development Brad Ball. Arbor Senior Operating Partner Tim Fallon will serve as the Chairman of Red Collar. “With the support of Arbor, our management team and over 400 former Mars associates are ecstatic to be in the market as Red Collar Pet Foods,” said Mr. Hamilton. “We’re committed to offering flawless service to our existing customers and look forward to building new relationships as we expand our customer base.”

“We’ve spent the last three months working closely with Mars and our new leadership team to efficiently separate the business so we could hit the ground running from day one of ownership,” said Arbor Partner Chris Harned. “The opportunities ahead are exciting and further reinforce Arbor’s enthusiasm to enter the dynamic and growing pet food industry.”

Arbor invests in the food, beverage and related industries. Typical targets will have annual revenues of up to $300 million and EBITDA from $5 million to $50 million. Since founding in 1999 the firm has acquired or invested in over 55 food and beverage companies in North America. In July 2016, Arbor closed its fourth equity fund, Arbor Investments IV LP, with $765 million of capital and its first subordinated debt fund, Arbor Debt Opportunities Fund I LP, with $125 million of capital. Arbor is based in Chicago (www.arborpic.com).

This transaction marks Arbor’s second acquisition via a corporate asset divestiture. “From our initial conversations, Mars Petcare has been a phenomenal partner to work with and I couldn’t be prouder of how our nimble team at Arbor executed throughout the complicated transaction,” said Arbor CEO Gregory Purcell. “In less than 100 days from signing, we successfully carved-out a top 15 U.S. pet food manufacturing company from a global food conglomerate.”

Mars Petcare is owned by Mars, Inc. which has been family-owned since 1911 and is the sixth largest privately held company in the United States. The business is comprised of more than 50 brands and provides nutrition and health services – it has the largest veterinary operations in North America – for dogs, cats, horses, fish and birds. Click HERE for the Mars Petcare website.

Kirkland & Ellis (www.kirkland.com) provided legal services to Arbor on this transaction.

© 2018 Private Equity Professional | December 4, 2018

Arbor Hungry for Private Label Petfood

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Arbor Investments has agreed to acquire Mars Petcare’s US-based private label pet food products business (Exclusive Brands or EB).

The agreement includes the division of Mars Petcare that produces private label pet food products for a variety of US customers through five manufacturing plants located in South Carolina, Ohio, Oklahoma (2) and California.

“As investors in growth and innovation, we are thrilled to have been selected by Mars to partner with CEO Chris Hamilton and his team to lead EB into an exciting future,” said Arbor Partner Chris Harned. “With an efficient and nationwide factory network, a loyal and experienced group of employees and a high-quality customer base, we look forward to playing an active role in the growing pet industry.”

Arbor invests in the food, beverage and related industries. Typical targets will have annual revenues of up to $300 million and EBITDA from $5 million to $50 million. Since founding in 1999 the firm has acquired or invested in over 55 food and beverage companies in North America. In July 2016, Arbor closed its fourth equity fund, Arbor Investments IV LP, with $765 million of capital and its first subordinated debt fund, Arbor Debt Opportunities Fund I LP, with $125 million of capital. Arbor is based in Chicago (www.arborpic.com).

“Pet has been a priority for us,” said Arbor Senior Operating Partner Tim Fallon. “As we look to leverage Chris Harned’s successful prior investments in Meow Mix and Freshpet, EB provides us with a proven platform for both internal and acquisition-driven growth opportunities.”

“Exiting the private label business in the US allows Mars Petcare to focus on growing its branded portfolio, including iconic favorites such as PEDIGREE, IAMS, GREENIES, and others,” said Mark Johnson, regional president, Mars Petcare North America. “The private label business has played an important role for us over the past 12 years driving scale and growth. As our focus has evolved, this sale gives Arbor the opportunity to further develop this business in the vibrant petcare category.”

Mars Petcare is owned by Mars, Inc. which has been family-owned since 1911 and is the sixth largest privately held company in the United States. The business is comprised of more than 50 brands and provides nutrition and health services – it has the largest veterinary operations in North America – for dogs, cats, horses, fish and birds. Click HERE for the Mars Petcare website.

BofA Merrill Lynch is the financial advisor to Mars on this transaction.

© 2018 Private Equity Professional | September 14, 2018

H.I.G. Sells Pro-Pet to Cargill

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H.I.G. Capital has sold Pro-Pet, a private label maker of pet food, to Cargill.  In December 2010, H.I.G. acquired Pro-Pet from Land O’ Lakes in partnership with the company’s management team. Land O’ Lakes maintained a minority position in the company alongside H.I.G. and senior management.

Pro-Pet is one of the country’s largest manufacturers of private label pet food, serving customers in the grocery, mass retail, dollar, and farm store channels. The company manufactures a full range of dry pet food, from economy to super premium to fresh meat inclusion, in a full range of bag sizes from 2 lbs. to 55 lbs.

Pro-Pet has manufacturing facilities in Ohio, Kansas, and Minnesota for distribution domestically and around the world. The company has more than 150 employees and is headquartered in Kansas City, KS (www.propet.com).

“During the course of our involvement, Pro-Pet has invested significant capital into its facilities and processes to be able to provide its customers with the full range of dry extruded food products. Becoming a part of such a respected, well-capitalized organization like Cargill is a fantastic outcome for the company’s employees, customers, and suppliers, and Pro-Pet’s facilities and knowledge base will provide Cargill with a great platform to grow its business in this category,” said Todd Ofenloch, Managing Director at H.I.G.

“H.I.G. helped us in providing both strategic guidance and capital required to transition to a market leader in super premium pet food manufacturing. The H.I.G. team brought to bear the resources that will allow Pro-Pet to continue to provide the highest level of quality and consistency to its current and future customers,” said Jim Wiegmann, CEO of Pro-Pet.

H.I.G. specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing and service businesses. H.I.G. has more than $24 billion of capital under management. The firm is based in Miami with additional offices in New York, Boston, Chicago, Dallas, Los Angeles, San Francisco, Atlanta, London, Hamburg, Madrid, Milan, Paris, Bogotá, Mexico City and Rio de Janeiro (www.higcapital.com).

Cargill’s animal nutrition business has more than 20,000 employees at more than 275 facilities in 40 countries. “Pro-Pet’s commitment to high-quality, safe pet food and passion for the pet food business is the perfect fit for our animal nutrition business, and allows us to better serve our customers seeking a focused supplier for both animal feed and pet food options,” said Pilar Cruz, the President of Cargill Feed and Nutrition.

Pet food is a top-growing category among agriculture retailers and the category continues to evolve with changing consumer preferences. “The pet food category continues to change, as indicated by the increased focus on premium offerings,” said Mark Lueking, the US managing director of Cargill Feed and Nutrition.  “Pro-Pet has the capability to satisfy this market need, and our mutual passion for serving customers make us a strong cultural fit.  We look forward to growing the business together by delivering a range of options to meet customer demand.”

Cargill is an international provider of food, agriculture, financial and industrial products and services to the world. The company has 155,000 employees in 70 countries and 2017 revenues exceeded $100 billion. Cargill is headquartered in Minneapolis (www.Cargill.com).

Harris Williams & Co. was the financial advisor to Pro-Pet on this transaction. The Harris Williams’ team was led by Ryan Budlong, John Neuner, Ryan Freeman, Zach England and Richard Furseth.

© 2018 Private Equity Professional | February 20, 2018