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Avallon MBO invests in MPPK Group - supplier of dog and cat food of the premium segment

Avallon MBO has signed an agreement to acquire 100% of MPPK Group in an IBO transaction and is awaiting approval from the OCCP. The company is a leading player in the pet food industry in Poland, focusing on premium and mid-premium dry and wet food for dogs and cats


December 18, 2023 

Based in Szymanów, Lower Silesia, the company started operations in 2013 and has built a wide range of products for pets in the pet food segment. The company's best-known brands include Wiejska Zagroda and Pan Mięsko. The range is complemented by distributing such brands as Alpha Spirit and Primal Spirit

MPPK Group's plans for the nearest future are to introduce new complementary products, attract more partners and increase the size of its business. One of the planned directions for growth is to acquire shares or merge with a manufacturer of high quality pet food.

Private equity fund Avallon MBO has signed an agreement to acquire a full stake in MPPK Group, being the eighth transaction of Avallon MBO Fund III. The company, which has been operating since 2013 with its base in Szymanów, Lower Silesia, offers nutritionally balanced pet food under the Wiejska Zagroda and Pan Mięsko brands and is the exclusive distributor of the two Spanish brands - Alpha Spirit and Primal Spirit. Its products are available in over 2,000 points of sale throughout Poland; in places such as stationary pet shops, veterinary surgeries, online shops and from breeders.

In 2022, the company's revenues amounted to PLN 110 million, recording a year-on-year increase of as much as 49 per cent. The Wiejska Zagroda and Pan Mięsko brands account for the vast majority of MPPK's sales. The company's flagship product sold under the Wiejska Zagroda brand is a premium food made from a combination of high-quality dried and fresh meat, with no wheat , soya, artificial preservatives or fillers. Expanding its product portfolio, the company intends to strengthen the segment of food products dedicated to cats, as well as launching sachets, snacks and dog treats. Available from 2021, the products under the Pan Mięsko brand is a mid-premium segment type of food made of high-quality dried meat, combining affordability with good quality.We are pleased to say that we have been able to successfully carry out the acquisition of the company in the pet food segment, which we were considering for a while. We have thus fulfilled our task of entering three new market areas: the IT industry (Globema - 2022), modern food (Hortimex - 2022) and the quality pet food segment,' explains Izabela Ciąćka, investment manager at Avallon MBO, responsible for the initiating and executing the transaction. - We see huge potential for this type of product. Nowadays, we are treating pet dogs and cats more and more like family members, and that is why it is important for us what is the quality of food we choose to buy for them. Consumers are becoming more educated and aware of the impact of nutrition on the health and condition of their pets, so they are increasingly looking for grain-free foods, those with extra health benefits, as well as products containing high-quality ingredients. Poland has the sixth largest population of dogs in Europe. However, this market is still relatively young and the popularity of ready-to-eat pet food is still much lower than in Western Europe. Only 35 per cent of dogs in Poland receive ready-made food, while in Belgium or Germany the percentage is estimated to be much higher. The potential for growth is very high and sales of ready-made dog food in our domestic market are gradually increasing," she adds.

The global market for pet food in 2021 was worth over USD 113 billion. This is predicted to grow steadily at a rate of 5.1% per year until 2027 (CAGR). Sales of dog food in 2023 reached $3.1 billion and are expected to grow at a current CAGR of 7 per cent to a projected $4.4 billion. The brands under the MPPK Group have an estimated market share of approximately 4% in Poland, and account for 29.2% of the market in one particular area.

Following the acquisition of MPPK Group, the Avallon fund now holds ten other companies in its portfolio. They are: Wosana and Hortimex representing the food industry, Marketplanet – a shopping platform, EDC Expert – a marketing company, Clovin - a company producing cleaning products, Globema a provider of geospatial software and IT services, Letniskowo – a manufacturer of mobile homes, Norlys - a manufacturer of high-quality outdoor luminaires and lighting equipment, TES - a manufacturer of electrical machines and components, and the SAT company - an owner of the S'portofino chain of shops of the sport & fashion segment.

About Avallon:

Avallon MBO is an expert and dependable investor in management buyouts. It has been investing in companies alongside managers for 25 years, and has taken part in over 100 transactions, with the total funds raised for investment purposes amounting to more than EUR 300 million.