This article first appeared in the August 11 issue of Buyouts.
Catterton Partners has sold Wellness Pet Food, a provider of natural pet food products, to a strategic buyer, earning 7x its investment and a 60 percent gross internal rate of return, sources close the transaction told Buyouts.
The buyout shop, headquartered in Greenwich, Conn., bought Wellness Pet Food for $45 million in equity in January 2004. It recently sold the Tewksbury, Mass.-based company for about $400 million to Berwind Group, a conglomerate that owns Elmer’s brand glue and Eagle Pack Pet Foods, among other products. The company, whose brands include All Wellness and Old Mother Hubbard, expanded its sales force and its product lines under Catterton’s tenure, more than tripling its revenue to approximately $150 million.
A number of strategic and private equity suitors had approached Catterton about the asset, our source said, drawn to an increasingly popular pet food sector that is addressing demand from consumers for better quality food products.
Wellness represents the second big exit for Catterton in four months. In April it earned more than 4x its money when it sold luxury hair product company Frederick Fekkai & Co. for more than $400 million—equivalent to 4x the company’s annual revenue, as previously reported in Buyouts.
***PS: This isn’t the first time Catterton has tried to sell the company–in April of last year the firm launched an auction led by Lehman Brothers. Soon after, growth in the pet food industry was overshadowed by several recalls issued by major pet food players (but not Wellness). The auction fizzled out in July when suitors were not willing to pay Catterton’s asking price. -EG