Pet food brand Prime100 considers potential sale

Investment bank Houlihan Lokey has been hired by Quadrant Private Equity to conduct a strategic review of Prime100, a premium pet food business. The review may recommend a sale to capitalise on high valuations in the fast-growing pet brand sector.

Transaction snapshot

• Deal value: Possible valuation exceeding $350 million

• Deal multiples: Possibly 3.5x revenue, 14x EBITDA

• Deal type: Sale of majority stake

• Investors: N/A

Prime100, founded in 2014, produces vet-backed, single-protein fresh food for dogs with food sensitivities. The company designs, manufactures, and packs all its products in Melbourne. Its range is stocked by major Australian retailers and has recently expanded into the north-eastern United States.

Quadrant acquired a controlling 55% stake in Prime100 in 2021, in a deal valued at over $150 million including debt. Since then, the business has tripled in scale. Current estimates suggest Prime100 generates about $100 million in annual revenue and $25 million in EBITDA.

Peter Elkhouri, Quadrant investment director, confirmed the strategic review, stating, "We are excited about where the business is at which has tripled in scale since we invested. We see huge runway for growth in Australia and offshore in our fresh and single protein diet products."

Potential buyers could include multinational companies like Mars Petcare or global private equity firms. The pet food sector has seen significant activity recently, with notable transactions including:

• Woolworths' $586 million acquisition of half of Petstock

• Bunnings' expansion into pet care

• Denmark's BHJ purchase of Staughton Group

Quadrant has previous success in the pet sector, having sold City Farmers for $205 million in 2014 and VIP Pet Foods for $1 billion in 2017.