Dane Creek Capital Corp. (DCCC), the pet industry’s merchant bank, announced it has acquired Spring Meadows Natural Pet Food, a manufacturer of frozen raw pet food for dogs and cats. Spring Meadows is located in Saskatoon, Saskatchewan, and sells its products via pet specialty retailers mainly in western Canada.
The purchase price represents 0.72 times trailing 12-months revenue. The purchase is an all cash transaction. No other terms were announced.
Founded in 2004 by farmers Brett Flahr and Regan Sloboshan, Spring Meadows recipes feature high-quality whole ground animal, including meat, organ and bone, sourced predominantly through local farmers to create a fresh and healthy pet food. The product line includes pure protein meals with beef, chicken, fish, turkey, lamb, rabbit and bison as well as mixed meals with added fruits and vegetables. Spring Meadows pet foods come in a variety of package sizes including bulk options and are prepared using a fine grind so as to appeal to owners of small dogs and cats as well as larger dogs. Flahr will continue on as president of Spring Meadows, reporting to Mark Murakami, president of United Raw Pet Foods Inc., a subsidiary majority owned by DCCC.
The acquisition of Spring Meadows marks DCCC’s fourth acquisition of a Canadian raw pet food manufacturer in the last 12 months. In Q4-2017, DCCC acquired Mountain Dog Enterprises Inc. of Edmonton, Alberta; in Q1-2018, the Company acquired both Pets4Life and Naturawls Pet Products based in St. Thomas, Ontario. With the addition of Spring Meadows, DCCC now has manufacturing capability in three provinces. The Company believes more and more pet owners are moving their dogs and cats to a raw diet.
“We are delighted to be making this announcement,” said Glen Tennison, president and CFO of DCCC. “We are impressed by the quality and attention to detail Brett and his team have devoted to making a nutritious raw food which some retailers have said is the best in the business. We look forward to Brett’s involvement as a key leader on the DCCC team as we look to expand the reach of our raw pet food brands in support of pet specialty retailers across Canada.”
Traceability is a core feature of Spring Meadows’ raw meals, which originally used meat from livestock raised by the founders. As demand outstripped supply, Flahr and his partner were able to leverage their relationships with local farms to sustain their ‘farm-to-bowl’ philosophy. DCCC believes traceability and vertical integration in the raw food category will become of increasing importance as blockchain technology reaches the pet food world. The company has already begun moving toward applying blockchain to its pet consumables businesses, including its four core raw pet foods brands, three dehydrated treats brands, and Baie Run supplements brand. DCCC believes pet specialty retailers and pet owners will increasingly demand transparency in all the products they feed their pets and blockchain technology will give the company a significant competitive advantage over others in the industry.
“I am very pleased to be joining the Dane Creek team,” Flahr said. “I believe the model they have developed puts them at the forefront of the industry, and I look forward to working with them to grow Spring Meadows as a leading raw pet food brand across Canada.”
Dane Creek also led a $4 million seed round for PetPlate, a direct-to-consumer subscription service that delivers fresh-cooked pet meals.
“We are delighted to support PetPlate in its mission to become the market leader in the DTC fresh pet food category,” said Mark Warren, chairman and CEO of Dane Creek Capital Corp. “Demand for a healthy alternative to kibble will grow exponentially in the next few years. Given the superior quality of PetPlate and the emotional connection that consumers have with the brand, we are confident in the team’s ability to lead this next generation of pet food.”