CHICAGO — ADM is venturing further into the manufacturing side of the pet treat and supplement market. The company announced Sept. 8 plans to acquire a majority stake in P4 Companies, which currently owns four co-manufacturing businesses: PetDine, Pedigree Ovens, The Pound Bakery and NutraDine.
ADM established transaction values totaling approximately $600 million for all four private label enterprises, and intends to acquire 75% of the group’s equity.
“We’re continuing to advance our growth strategy and transform our company with targeted investments that expand our capabilities in large, high‐growth segments, including pet nutrition – a key focus of our growing animal nutrition business,” said Vince Macciocchi, president of ADM’s Nutrition business. “Annual global sales of pet food total $110 billion, forecast to grow to $140 billion by 2026 – with pet treats an even faster‐growing category. We’ve grown to meet that demand, from the construction of new production facilities, to the additions of pet treat and food provider Crosswind and Neovia’s global pet nutrition business, to the opening of our industry‐leading Animal Nutrition Technology Center in Decatur.
“Now, we’re taking the next step in our strategic journey with a majority investment in P4. We’re excited by this agreement, which we expect to exceed our hurdle rates and financial return targets as we partner with an innovative, high‐growth business with a great track record of working closely with customers around the globe to develop and produce best‐in‐class pet products.”
These four P4 Companies offer capabilities in baked pet treats, semi-moist treats, long goods, blends, unique proteins, soft chews, and liquid and powder meal toppers, many of which include clean label formulation options. P4 Companies employs more than 300 people, distributing product to more than 650 customers in 15 countries.
“ADM’s global resources — from ingredient supply chain, transportation and their emerging pet nutrition platform — are what we were looking for in a partner,” said Kurt Stricker, owner of Pedigree Ovens. “We are excited to continue our strong growth path together.”
As part of the acquisition plan, ADM will assume ownership of P4 Companies manufacturing footprint spanning more than 300,000 square feet across Colorado and Illinois. The agreement will also leave room to negotiate a full acquisition — with ADM purchasing the remaining 25% of P4 Companies’ equity — in years to come.
“As a group, our companies PetDine, Pedigree Ovens and The Pound Bakery, have become clear leaders in the pet supplement and treat space,” said Preston Munsch, chief executive officer of PetDine. “Through innovation, R&D and manufacturing expertise, we have become important strategic partners to brands around the world. Through this new and exciting partnership with ADM, we will be able to advance our customers’ lead positions in the pet industry even further. Through their extensive list of ingredients combined with their Animal Nutrition Technology Center and worldwide resources, we are excited to merge our knowledge and expertise to continue to be innovative leaders in the pet industry.”
Lexie Berglund, president of The Pound Bakery, added, “Joining the ADM family gives us the ability to elevate and expand our product offerings to our customers and continue to support their ideas and growth.”
ADM and P4 Companies are also aligned in their sustainability philosophies. In 2020, P4 Companies transitioned its Harvard, Ill. facility to solar power, with capacity to offset nearly 1,500 tons of greenhouse gas emissions per year.
“Two years ago, ADM identified the humanization of pets – owners who want to provide their companion animals with the same kind of clean, simple, healthy products they eat themselves – as an important growth trend,” Macciocchi said. “This partnership positions ADM perfectly to continue to meet those needs. We’re excited to partner with the great P4 team, and we look forward to collaborating with them to combine their best‐in‐class customized solutions with ADM’s extensive pantry of ingredients, natural colors, and flavors; application development expertise; rapid prototyping and innovation capabilities; and global go‐to‐market footprint.”
This initial majority acquisition is expected to close in a matter of weeks, subject to regulatory approval.
Read more about Pedigree Ovens and The Pound Bakery in our exclusive processor profile from 2018.
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