With a refinancing under its belt and a new chief executive in place, the market is once again abuzz with chatter that Real Petfood Company is set to place itself up for sale.
Expectations are building that this could happen by Christmas.
Its enterprise value is $451m and its book value $360m according to IBISWorld and it comes after there was some talk a year ago that a sale could be on the cards.
It is understood that the group is yet to hire an investment banking adviser.
Recently, Germaine Chua was named the new chief executive, replacing David Grant.
The company underwent a $243m refinancing last month, with existing investors injecting more capital into the business. These include Chinese conglomerate New Hope Group, Singapore state-owned company Temasek and private equity firm Hosen Capital.
Real Pet Food describes itself as a leading international pet food company with operating businesses in Australia, New Zealand, China and the UK.
It is the largest independent pet food manufacturer in Australia and is among the 20 largest in the world.
It sells a range of products through grocery, pet speciality and e-commerce channels under brands including Farmers Market, Nature’s Gift, Billy + Margot, Ivory Coat, Love’em pet treats and Fussy Cat.
New Hope, Hosen Capital and Temasek purchased The Real Petfood Company in 2017 for $1bn from Quadrant.
Quadrant purchased VIP Petfoods in 2015 for $410m, expanded the operations and renamed it the Real Petfood Company before selling it just two years later.
The company with 662 employees, operates a manufacturing plant in Inverell, NSW, which has the capacity to produce up to 50,000 tonnes of dry pet food, and has the pet treat maker Vet’s Best Products.
According to IBIS World, the Real Pet Food Company has 16.1 per cent of the Australian pet-food market behind Mars Wrigley and Nestle, and supplies products directly to the supermarket chains.
For 2021, it generated $488m of revenue and $34m of earnings before interest, tax, depreciation and amortisation. Overall, it made a $28m loss.
IBISWorld says the pet-food industry generates $3bn of revenue annually and $288m of profit. It has stagnated following booming demand amid the global pandemic in 2020 and 2021.
Pet food companies sold for strong prices during the global pandemic during which the rate of pet adoption soared.
Kohlberg Kravis Roberts bought Natural Pet Food Group last year, and New Zealand-based natural pet-food provider ZiwiPeak sold to Chinese fund FountainVest for about $NZ1.5bn.
Woolworths in December paid $586m for a 55 per cent stake in the owner of PETstock, the number two retailer in the Australian market.
The other pet retailer and vet service provider that could also come up for sale is TPG Capital’s Greencross, which may consider an IPO if conditions improve.
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