Translated by Milo Dvorak
1. 7. 2024
Business Newsletter #47
Good morning,
Perhaps a bit unusually, this newsletter discusses a major foreign investment in a Czech-made pet food producer.
Published by hn.cz on 1 July 2024 (a premium subscription may be required)
Multi-billion Business with a Strong Czech Footprint. Pet Food Manufacturer from Veselí nad Lužnicí and Brniště Has a New Owner
The London-based fund, CVC Capital Partners, has invested in Avast, taken control of Zásilkovna and is now acquiring PPF. However, this is not the leading Czech financial group PPF built by Petr Kellner, but rather a company using the same acronym – Partner in Pet Food; one of Europe's largest dog and cat food producers.
A significant portion of its production and revenues is generated in the Czech Republic. The company has two plants here, in Veselí nad Lužnicí and Brniště near the Lužické Mountains, where it produces food for wholesalers as well as its own brands, such as Shelma, Polaris, PreVital, and Propesko. "We plan to continue building on these capacities and the knowledge of local employees so that the Czech Republic remains one of the strongest pillars of the entire group," says Jakub Čanda to HN, CVC's investment manager responsible for the transaction.
Partner in Pet Food is originally a Hungarian company, primarily supplying its production of dry animal feed to private brands of European retail chains and discount stores. PPF has a total of 12 production plants across Europe and supplies 280 customers in 35 countries worldwide. Last year, the company reported revenues of 800 million euros (approximately CZK 20 billion).
"The opportunity to invest in a company with excellent results and a proven business model is an outstanding opportunity. It has great management and the ability to continuously grow faster than the market, as evidenced over many years despite changing economic cycles. We look forward to supporting the company in its next development phase, particularly in acquiring other firms," said Čanda.
After last year's purchase of Zásilkovna, or rather its parent company Packeta, this is another major "achievement" for the young Czech investment manager. Before this, he had invested in the originally Czech group of reproductive clinics, FutureLife.
PPF is a hot commodity for private equity due to its revenues and stable business. One only needs to look at its recent owners among major investment funds. The company was acquired by Advent in 2011, followed by Pamplona Capital Management four years later (at that time, it was also being considered by Andrej Babiš and his group Agrofert), then Cinven in 2018, and now it is in the hands of CVC. However, Cinven remains in PPF's ownership structure as a minority co-owner.
Neither side disclosed the sale amount, but Reuters reported in the spring that Cinven envisaged the company being valued at two billion euros (CZK 50 billion). Incidentally, just nine years ago, PPF was sold for CZK 9 billion.
"We are thrilled that CVC has become our new majority owner. I believe it will strengthen our ability to produce healthy products for our customers and assist us in the mergers and acquisitions market," noted Gerald Kuehr, CEO of Pet PPF.