AlphaPet Ventures gears up to collect first-round bids as investors weigh up pet food's appeal

Information memoranda (IMs) marketing the Munich-based company off around EUR 25m EBITDA for 2023 are in circulation, two of the sources and a fourth source familiar said. AlphaPet is forecast to post around EUR 200m in sales in 2023, according to one of the sources.

First-round offers are expected to be collected throughout the first half of July, another source added.

Stifel is advising the seller on the process, which could be for up to a majority stake, as previously reported. The deal structure is likely to include a mix of primary and secondary shares, one source said.

The vendors are striving to fetch a sale multiple of 15x EBITDA, implying an enterprise valuation (EV) of around EUR 375m, one source noted.

While pet food is typically viewed differently from other discretionary consumer assets, as pet owners are seen as unlikely to cut back on spending for dogs and cats, even in a recession, some bidders might nonetheless have reservations over the company given its consumer exposure, one of the sources and a fifth and sixth source familiar said.

Financial sponsors, as well as strategic players, are expected to show an interest in the asset, two of the sources said.

Private equity firms who could look and submit first-round offers include FSN, Ardian and EQT as well as sponsors with experience in petfood such as IK and TA Associates, according to one source. Strategic players in AlphaPet's sector who are likely to look could include Mars and Nestle, the same source added.

Rivean Capital, formerly Gilde Buyout Partners, is also interested in AlphaPet, a seventh source added.

In April, this news service reported that AlphaPet was gearing up to hit the market to onboard an investor primarily to fund future growth and finance its M&A strategy, with management staying onboard regardless of the transaction outcome.

AlphaPet is backed by several VCs who have been invested for years, as well as sponsor capiton, who joined in 2020.

Under capiton's stewardship, the company has performed well and consolidated several add-on acquisitions that have been completed since the Berlin-based sponsor invested, one of the sources said.

Recently, completed deals include AlphaPet's acquisition UK-based pet food brand Arden Grange in 2022 and German petfood manufacturer Herrmann's Manufaktur in 2023. AlphaPet Ventures was set up in 2016 through a merger between German e-retailers pets Premium and ePetWorld, as reported.

The company does not have a majority shareholder, and backers include Reimann Investors, Venture Stars and Mountain Partners as well as management and capiton, as reported.

In 2020, capiton acquired a 35.9% stake in AlphaPet for an undisclosed sum as part of AlphaPet's acquisition of German petfood retailer Healthfood24, according to Mergermarket data.

AlphaPet Ventures is a "technology-driven brand platform" focused on digitising the pet market, brand building and multi-channel distribution of premium pet food, according to its website. It sells directly to end customers (D2C) as well as through B2B channels, and its brand portfolio includes eight premium brands such as Wolfsblut, Wildes Land, PRIMUM and Müller's Naturhof.

AlphaPet, Ardian, Nestle and capiton declined to comment. Stifel, Reimann Ventures, Venture Star, Mountain Partners, Rivean, EQT, FSN, IK, TA Associates and Mars did not respond to requests for comment.

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• Topics
• Exits
• DACH
• Consumer
• capiton AG
• Germany
• Mergermarket