(Reuters) Australia’s Quadrant Private Equity on Monday said it agreed to buy V.I.P. Petfoods (Aust) Pty Ltd, the world’s largest supplier of chilled petfood, for A$410 million ($313.86 million), with plans to grow exports to the United States.
V.I.P is the biggest Australian-owned petfood company and competes with two larger suppliers, Swiss-listed Nestle SA and privately-held U.S. firm Mars Inc, Quadrant Managing Director Chris Hadley told Reuters.
Australian private equity companies are hunting for new acquisitions after a blockbuster year of exits in 2014 helped drive listings to a record $15 billion for the year. Some buyout firms have complained that deals are too expensive since record low interest rates and a 5 percent surge in the share market since Dec. 31 have pushed up valuations generally.
In November, Quadrant raised A$329 million by selling billboard company APN Outdoor Group Ltd in an initial public offering.
Gold Coast-based V.I.P. generated about A$50 million a year in earnings before interest, tax, depreciation and amortisation, so the sale price amounted to eight times earnings, Hadley said.
Rather than cut costs, Quadrant planned to invest in growing V.I.P.’s sales volumes and exports to the United States before considering listing the company in three to five years.
“We’re going to do some capital works that we think will result in some efficiency, and also grow capacity because we think we can actually grow volumes of chilled petfood (and) export product into the U.S. particularly,” Hadley said.
Quadrant said it was advised by PwC, Deutsche Bank AG and law firm Gilbert and Tobin. It said V.I.P. was advised by PwC and Couper Lawyers.
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