MPM Products CEO Julian Bambridge

Luxury petfood manufacturer MPM Products is set to accelerate international growth after selling a majority stake to mid-market private equity firm ECI Partners for £50m.

The business, which makes natural, premium food using chicken breast, tuna and prawns for dogs and cats under the Applaws and Encore brands, will focus efforts primarily in the US where it has just won a listing with Petco, one of the two big specialist retailers in the country.

Exports already account for more than 55% of group revenues, which are expected to hit £50m this year, with a presence in more than 33 countries.

The sale to ECI follows a “very competitive” auction for the business with interest from a host of private equity suitors keen to benefit from high levels of growth in the premium segment of the category, as reported by The Grocer in January.

CEO Julian Bambridge and CFO James Bracewell will continue to run MPM in partnership with ECI, with founders Roger Coleman, Roger Wood and Jon Kinsey, who were advised by PwC, remaining as minority shareholders.

ECI partner Mark Keeley, who will take a seat on the MPM board, said the investment would help grow the international business further and develop the e-commerce strategy, with online already contributing 20% to total sales and “growing very strongly”.

“Pet owners are increasingly concerned about the health and well-being of their cats and dogs and are looking for wholesome, natural, high-quality products,” he said. “That’s why we believe MPM is very well placed for further growth.”

MPM has been growing revenues by about 25% each year since Bambridge joined in 2009, with sales increasing 17.3% to £29.3m and profits more than doubling to £2m in 2014, according to the latest available figures.

Keeley added there was plenty of room to capture more of the £50bn global petfood market and continue the high levels of organic growth in the UK and overseas.

“There is a lot of market to go for and no shortage of growth opportunities facing the business but we need to decide which ones to prioritise and focus on, and clearly the US is at the top of that list following the Petco listing,” he said. “The business is also targeting Asian market, with lots of demand from China and Japan.”

He added despite MPM being stocked in all major UK supermarkets, as well as specialist retailers such as Pets at Home, there was still potential to increase the listings at the existing customers with new product development.

ECI, which typically invests in growth companies valued between £20m and £150m, has experience backing consumer businesses, with other current investments including Evans Cycles, Great Rail Journeys and Rhubarb.

The ECI deal follows a number of recent transactions in the premium petfood category, with Catterton investing an undisclosed amount in Lily’s Kitchen in August and Piper backing natural brand Forthglade in September. Premium petcare brand Pooch & Mutt also secured a five-figure bank funding package with NatWest last month to keep up with soaring demand.

James Murray, global head of consumer M&A at KPMG, who advised ECI, said: “The pet food market continues to be driven by a number of powerful underlying trends which support the growth, particularly in the premium category. This is attracting significant interest from investors in what is still relatively fragmented industry and we anticipate further consolidation and investment activity.”