City snapshot: MPM snapped up by 3i Group in £125m deal

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Premium pet food manufacturer MPM has been sold by ECI Partners to private equity investor 3i Group as the flurry of deals in the petcare space continues.

The Manchester-headquartered business produces premium, natural pet food for cat and dog owners under the Applaws, Encore and Reveal brands.

MPM has grown revenues consistently by more than 20% each year for the past five years.

Its products are sold across 50 countries and the business has maintained strong growth this year, proving to be “highly resilient” since the initial impact of Covid-19, the business said.

ECI first invested in MPM in March 2016 to help support its international growth and today more than 60% of the business’ revenues are international, with strong growth in the US and Asia Pacific markets.

3i Group has invested £125m in the business alongside the management team to give ECI a return of 4.4x.

MPM CEO Julian Bambridge said: “3i has a formidable track record in helping its companies to grow internationally, particularly in the US market.

“This will be especially key for MPM as we look to accelerate our expansion in North America. The 3i team also has significant brand expertise through a number of its consumer investments, which will be of great benefit to MPM.”

3i director Rupert Howard added: “We have been tracking MPM for a long time and are delighted to invest in this rapidly growing, resilient business.

“Owners looking to feed their pets natural, high-quality food with recognisable ingredients are drawn to MPM’s brands across a variety of channels and geographies. MPM fits well with 3i’s desire to invest in strong mid-market businesses where we see significant headroom for further international growth. We look forward to supporting Julian, James and their excellent team with their ambitions.”

Morning update

The FTSE 100 has surged past the 6,000 mark this morning thanks to the Biden bounce as markets welcomed clarity after the drawn-out US Presidential election.

London’s blue-chip index rose 1.6% to 6000.32pts after opening.

As for grocery and fmcg stocks, Irish petrol station group Applegreen is up 5.5% to 290p, Fevertree is up 3% to 2,156p and SSP Group is up 2.7% to 191.8p.

Early losers include Hotel Chocolat, down 2.1% to 342.7p, Finsbury Food Group, down 1.1% to 55.4p, and Bakkavor, down 0.3% to 65p.

Nestlé has acquired a majority stake in recipe kit business Mindful Chef for an undisclosed sum.

Founders Giles Humphries, Myles Hopper and Robert Grieg-Gran, who started Mindful Chef in 2015, will remain shareholders and continue to run the business as part of its management team.

Revenues are set to hit £50m this year after the Covid-19 crisis lead to a huge spike in demand for the business’ healthy recipe kits and frozen meals, according to the company.

Nestlé CEO Stefano Agostini said: “Nestlé and Mindful Chef share an ambition to increase the availability and convenience of healthy food while paying close attention to how ingredients are sourced and reducing food waste. It means this is an ideal partnership for both parties as Nestlé continues to transform its portfolio and Mindful Chef accelerates its growth plans.”

For the full story see thegrocer.co.uk this morning.

This week in the City

It is looking like a busier week with plenty of results to report.

Tomorrow brings first-half results from Premier Foods, fresh from its windfall generated from the sale of Hovis to Endless.

European Coke bottle Coca-Cola HBC issues its third-quarter numbers tomorrow.

Also tomorrow is the latest monthly retail sales update from the BRC and KPMG, alongside the Barclaycard spending report.

Thursday will see WH Smith will give the market some idea of the extent of the damage caused by the coronavirus pandemic on its travel business.

B&M European Value Retail, which has been one of the relative winners of the crisis, also reports first-half results on Thursday.

In the US, this week also brings quarterly updates from McDonalds, Beyond Meat and Hain Celestial, with all three companies reporting today.