CapVest closing in on Butcher’s Pet Care buyout | News

CapVest is in final stage negotiations for a buyout of Butcher’s Pet Care as the London-headquartered PE firm looks to expand its petfood empire.

The Grocer has learned that CapVest is the last remaining party in the long-running auction being conducted for the petfood maker by investment bank Houlihan Lokey.

Butcher’s would boost the firm’s holdings in the category following a takeover of Inspired Pet Nutrition (IPN) in 2020.

City sources said a deal could be signed in the coming weeks, but added there were still potentially stumbling blocks over valuation expectations. It is not clear at this stage what price tag is currently on the table for Butcher’s.

“CapVest don’t have a habit of overpaying for assets,” one dealmaker source said. “It will only do a deal if the price is right.”

Northamptonshire-based Butcher’s is a family-owned business, founded by Graham Baker in 1987.

It returned to profitability in the year to 31 July 2023 thanks to a turnaround and renewal programme, with turnover soaring 28% to £138.4m.

The performance was driven by outperforming the wider branded dogfood category and expanding distribution in catfood following the launch of new ranges.

Butcher’s also has a growing market overseas, served by its factory in Poland.

The company hired Houlihan Lokey last year to explore investment options, but the sales process has taken a long time as the M&A market stalled because of the wider economic challenges.

However, a number of deals have been completed in the petcare category in recent months.

Last week, PE firm Inflexion sold its holding in rapidly growing pet supplements supplier Lintbells to Vetnique Labs. General Mills swooped for premium petfood challenger brand Edgard & Cooper in April, while TDR Capital took control of petcare retail chain Jollyes in February. Last year, petfood subscription service Butternut Box raised a further £280m investment in a deal valuing it at more than £500m.

CapVest has been active in petcare since 2020 when it picked up IPN in a £250m deal.

IPN owns Harringtons, which is the biggest dry dogfood brand in the UK, and Wagg. It also bolted on Pet Food UK in 2021 to add the Barking Heads and Meowing Heads brands to the portfolio.

CapVest and Houlihan Lokey declined to comment.