Deals

AGR sells pet food ingredient unit to Olympus Partners

Managing director Daniel Masters says PE has invested less in the supply chain for premium pet food ingredients.

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Nuveen’s agribusiness-focused affiliate AGR Partners has sold the land-based animal protein division of 3D Corporate Solutions to mid-market private equity firm Olympus Partners for an undisclosed sum.

The deal sees Stamford, Connecticut-headquartered Olympus partner with 3D founders Ed Mareth and Kevin Keeling, according to a statement.

Established in 2002, 3D provides more than 35 pet food ingredients, specialty products and related storage and freight services to pet food brands and manufacturers. Its land animal protein business includes poultry, beef and lamb and focuses on supplying producers of premium pet food.

“We think 3D is outperforming their competition in a very attractive sector,” said Olympus partner Dave Cardenas.

3D’s other units, which include marine and non-grain ingredients businesses, were not included in the sale and will continue to operate under the new brand LinkOne.

In November 2015, AGR made a minority growth capital investment of an undisclosed size into 3D.

AGR managing director Daniel Masters told Agri Investor the firm’s interest in pet food grew out of a study of the specialized poultry ingredients business in 2014. It showed premium pet food demand was growing at a 3.5 percent annual pace that surpassed demand for poultry.

There have since been private equity investments in contract packing companies and others that produce ground meal shaped into pellets for pet food, Masters said, highlighting the December acquisition of Mars Petcare’s US-based Exclusive Brands business by food investment-focused private equity firm Arbor Investments as a recent example. That business has re-launched as Red Collar Pet Foods.

“Our focus area is closer to the farm gate and we don’t know of a lot of private equity investment back in the value chain into the ingredients space for pet food,” Masters said.

In October, Davis, California-headquartered AGR completed a $100 million sale of New Zealand-based protein production equipment provider Tru-Test Group to Datamars, a Swiss provider of identification and tracking devices.