Catterton Partners Earns 7x Return On Pet Food Deal

Target: Wellness Pet Food

Price: $400 million

Sponsor: Berwind Group

Seller: Catterton Partners

Just like their owners, pets are eating healthier these days. Who knew?

Apparently Catterton Partners, which 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 to 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 its namesake 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 products.

Wellness Pet Food 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.

Catterton, which manages $2 billion, bought both companies almost entirely with equity and eventually financed the deals with minimal senior leverage.

Catterton invests out of its $1 billion sixth fund, which it closed in 2006. Founded in 1990, the firm seeks buyouts, turnarounds and growth capital investments in mid-market consumer-products companies.