Nordic investment firm IK Investment Partners has bought a majority stake in premium petfood supplier Forthglade in a deal that will see existing PE investor Piper exit the business.

IK Investment Partners announced today its Small Cap II Fund had bought a majority stake alongside investment from Forthglade’s existing management team.

Piper Private Equity will exit the business as part of the deal, having invested £6m in the brand £6m back in 2015.

The upmarket supplier of wet and dry dog food and treats was founded in 1971 and has been led by joint MDs Gerard Lovell and Chris Brooking since their management buyout in 2011.

Reports suggest that the transaction will give IK Investment Partners a stake of around 80% of the business, valuing it at approximately £50m.

The deal comes after The Grocer suggested Forthglade was one a flurry of pet food brands set to come to market in 2020.

It was understood that Forthglade and Piper had been working with corporate finance house Houlihan Lokey, which also worked on the sale of Lily’s Kitchen to Nestlé Purina earlier this year, to find a buyer.

Lovell commented: “We have thoroughly enjoyed working with Piper whose support and expertise have been invaluable in helping us achieve so much.

“We are delighted to partner with IK for the next stage of our growth. With their experience across food production and animal health and an established Pan-European footprint, they are well placed to help us grow our offering and enter new markets.

“We have exciting plans ahead as we look to expand our success in wet into cold pressed and treats, and we see a strong runway for growth ahead.”

The transaction represents the 10th investment from IK’s €550 million Small Cap II Fund and “marks a significant milestone” for IK’s recently formed UK Small Cap team

Tom Salmon, Partner at IK and advisor to the IK Small Cap II Fund, added: “Forthglade is an excellent business and a great fit for our investment strategy. We have been very impressed with the achievements of Gerard, Chris and the rest of team in growing the business in recent years, and we are delighted to be backing them in the first investment made by IK’s new UK investment team.

“The market for natural pet food in the UK is particularly strong and resilient, and we see significant further growth potential for Forthglade in the UK and beyond in the years to come. With our strong track record in supporting growing food production and animal health companies, we look forward to similar success with Forthglade.”

Based in Okehampton, Devon, Forthglade employs over 130 people in the UK, and distributes across supermarkets, independent specialist pet retailers and online retailers including its own website

Forthglade has grown branded sales by over 30% per annum in the last three years and is set to generate over £22m in sales in the year to September 2020 having seen sales accelerate ahead of plan throughout the lockdown period.

With IK’s investment, Forthglade plans to increase brand awareness and distribution to drive growth in the UK and overseas. IK will also support Forthglade’s ongoing digital development, as well as further expansion in the business’ product range and growth in its manufacturing capabilities.

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