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This article is from the Australian Financial Review. Click here for the original article.
Colgate-Palmolive, the American consumer goods giant, is buying Australian premium pet food company Prime100 from Quadrant Private Equity in a deal that values the business at almost $500 million.
The Sydney buyout firm acquired a 55 per cent stake in Prime100 – which makes fresh food products for dogs with food sensitives including air-dried chicken and rice and slow-cooked crocodile – in 2021.
Colgate-Palmolive, which is listed in New York, is best known for its dish soap and toothpaste brands but is expanding its Hill’s Pet Nutrition business. The range is stocked by retailers including PetO, Petbarn and Pet Circle.
Prime100 designs, manufactures and packs its products in Melbourne. The purchase price was not disclosed but the deal – including debt – is estimated to value the company at nearly $500 million.
Quadrant investment director Peter Elkhouri, who oversaw the investment in Prime100, said the company had tripled its manufacturing capacity and successfully expanded overseas. “These initiatives have driven Prime100 to close to tripled revenue and grow profit by more than four-fold,” he said.
“This is true partnership with the founders. We invested ahead of the growth in manufacturing and stayed focused on key strategic priorities. These are the core tenets we want to be known for in our growth fund.”
Prime100 is estimated to generate about $100 million in annual revenue and $25 million in earnings before interest, tax, depreciation and amortisation.
Quadrant has had a number of successful investments in the pet sector, including VIP Petfoods (now called The Real Pet Food Company) which it sold for $1 billion in 2017. In 2014, it hived off pet stores City Farmers to TPG Capital-owned Greencross – Australia’s biggest pet care and vets company.
There has been plenty of interest in the pet sector over the past two years. Woolworths bought half of the Petstock chain for $586 million; Bunnings announced its biggest product expansion in decades with pet care in early 2023; one of the country’s largest pet food manufacturers Staughton Group was snapped up by Denmark’s BHJ last March and a month later Coles launched a new online pet store called Swaggle.
Marcus Darville, Quadrant’s managing partner and Prime100’s chairman, said the business was well-positioned to grow.
“This is a real home-grown success story. Colgate is one of the top pet care companies in the world – so this is significant that a company of that size is interested in this Australian business,” he said.
Quadrant was advised by Houlihan Lokey, Gilbert + Tobin and PwC. The transaction requires approval from the Foreign Investment Review Board.