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Private equity groups Advent International and CVC Capital have teamed up to bid for a pet food company owned by Cinven, leaving a single bidding consortium left seeking to buy an asset the UK buyout group has held for six years.
Advent and CVC were the two remaining investors competing in the process to acquire Partner in Pet Food, a Hungary-based maker of animal food. But the two groups have now submitted a joint bid, according to people familiar with the matter.
The sides remain in talks and there is no certainty that a deal will be reached, the people said. Cinven had previously sought a valuation of roughly €2bn for the business, one person said.
Private equity groups are under pressure to exit investments so they can return capital to investors. A slowdown in dealmaking means they are sitting on a record number of unsold companies, however.
Last year there was a particularly steep decline in the value of portfolio companies sold to other private equity owners, as rising interest rates have opened up a gulf in valuation expectations between buyers and sellers.
PPF, established nearly 25 years ago, operates across Europe including France, Italy and Germany. Its products are distributed to more than 600 customers including supermarkets, pet shops and vets in dozens of countries, according to its website.
Cinven bought it in 2018, when it had already spent several years in private equity ownership. Advent had previously acquired Partner in Pet Food in 2011, before selling the business to another private equity investor Pamplona Capital Management in 2015 for €315mn.
Buyout investors have poured money into the pet sector in recent years, enticed by trends that show strong spending on the pets that many people acquired during the pandemic.
Veterinary clinics have been a focus, with private capital groups such as EQT and KKR making significant investments in that sector.
But that sector now faces increased regulatory scrutiny. The UK’s competition watchdog announced plans this month for an in-depth probe into the veterinary market and whether the “roll-up” of thousands of small clinics may have forced up the price of treatments and drugs for the UK’s 16mn pet owners.
Since Cinven acquired PPF six years ago it has expanded the business through acquisitions. PPF had about €690mn sales in 2022 and €800mn last year, underscoring its continued growth, according to a person familiar with the accounts.
Advent, CVC and Cinven declined to comment.
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