“When times get tough, the true calibre of your board and investors becomes clear,” says Gerald Kühr, CEO of petfood manufacturer Partner in Petfood (PPF). “At a time of post-COVID challenges – when inflation in our cost base was almost twice our EBITDA – our board and Cinven really leant in and supported us.

They didn’t put extra pressure on me.” Then he adds: “That was tremendously important. It can be very lonely as a CEO.”

Cinven funds invested in PPF in 2018, acquiring what Cinven saw as a regional champion in Central and Eastern Europe with the potential to become a European leader in the pet market. The Cinven funds took a majority stake, with management holding a minority.

In typical Cinven style, the deal team had already invested significant time in understanding the pet care market, and identified private label, and PPF specifically, as an attractive way to play several consumer megatrends; as a result, the deal team was well placed to move fast once PPF was for sale.

“It was a competitive process, but we had conviction in our thesis which allowed us to move quicker than the other bidders,” says Matteo Corà, Partner at Cinven.

Long term structural growth in the pet category, underpinned by the consumer megatrend of “Pet Humanisation” meant that the sector was a priority for Cinven. The growing importance of private label for retail partners, the scope for premiumisation and the potential for consolidation in a fragmented market were key pillars of the investment thesis. The plan for PPF was to premiumise the business through expanding into premium product categories, new geographies, channels, and customers. The plan was executed through organic levers and mergers and acquisitions (M&A).

“At acquisition, the business was predominantly serving the Central and Eastern European markets, with a product portfolio focused mainly on entry level dry and canned pet food. We saw a significant opportunity to expand into Western Europe, typically a consumer of more premium pet food products, and we doubled down on the pouch and snacks product categories which are the most attractive. Today, Western Europe represents half of the business, and pouch and snacks drive nearly half the profits of the business,” says Maxim Crewe, Partner at Cinven.

Cinven funds held PPF for six years, selling a majority stake to CVC in October 2024, while continuing to remain invested in the business to benefit from further upside. During the Cinven funds’ ownership, PPF more than doubled revenues. More importantly, EBITDA almost quadrupled, driven by the expansion into Western Europe, boosting pouch and snacks contribution, improving revenue management practices, and expanding into the premium channels such as pet specialist and e-commerce.

It’s who you know

But it wasn’t all plain sailing. Initial growth was sluggish as the business required significant professionalisation. Cinven appointed Xavier Belison, a seasoned executive in the consumer space, as Chairman of the board, and subsequently made several management changes, including the hiring of CEO Gerald Kühr from Unilever in July 2020. Gerald was immediately faced with the challenges of running a business through COVID, and then the even more severe challenges of a heavily disrupted supply chain, which together with a series of macro events, led to unprecedented inflation across PPF’s core raw materials, packaging and energy input costs.

“Overnight we were experiencing massive cost increases, and we had to react with immediate and significant price rises and also change how we operated to become more flexible and reactive in the following weeks and months. Gerald was exactly the right person to do this,” says Crewe.

With a background in consultancy as well as at consumer heavyweights Unilever and Procter & Gamble, Gerald was experienced in not only managing employees and a P&L but also managing customers.

“I realised, for example, that I had to talk to customers such as Lidl and Aldi myself about the price rises. I had to be humble. But I knew the whole industry was in the same boat,” says Kühr.

PPF was able to take advantage of the situation of disruption to further accelerate the value creation opportunities in premiumisation.

Growing by acquisition and expansion 

This is where Cinven’s M&A expertise came in. The petfood market is a fragmented market with a long tail of smaller businesses to acquire, and in the 6 years of ownership, PPF was able to acquire 5 businesses that complemented its strategy.

“We leveraged our regional and consumer sector teams’ knowledge and connections to support management with identifying and building relationships with targets that could support the geographical expansion and premiumisation strategies at the category, regional, customer or market access level,” says Elie Rizk, Associate at Cinven.

With a long list of potential acquisition targets, PPF developed a focussed strategy, spending time on those opportunities that could add access to new geographies or who had expertise in producing premium product categories or selling to premium channels like pet specialist stores and e-commerce.

Over three years, PPF invested over €250 million to acquire five companies. Before the Cinven funds’ exit, these acquisitions had added some €260 million a year in sales. Again, Cinven’s expertise was invaluable to management, with the Capital Markets team helping to arrange the best possible financing solutions and deploying a currency hedging strategy to manage risk.

Beyond finance, PPF and Kühr were also able to draw on Cinven’s operational experience to improve procurement and supply chain, and manufacturing efficiency.

Progress has clearly not been unfettered but at each step of the way, Cinven and management reached a consensus. “Everyone was incentivized in the same way in terms of value creation. We were all asking how we can make the company better,” says Dominic Robinson, Principal at Cinven. “Anything we did was backed by analysis and numbers and we discussed it at the board. Our boards are an open forum to test and challenge ideas in a very collaborative way. That’s the way to get the best decisions.”

Building a business based on sustainable behaviour

The final part of the value creation story was a very structured approach to incorporating sustainability values. “This is not something we do for the rating agencies or our sustainability report, but is something we live by,” says Kühr.

This manifested in a comprehensive sustainability framework that covered supply chain transparency, the environment, staff well-being and community support. Again, the company’s efforts were supported by Cinven’s own Sustainability team, who helped to develop the strategies alongside PPF and to monitor progress. As a result, PPF’s Code of Conduct includes a sustainable sourcing policy and it is the only European private label pet food supplier with validated science-based targets to reduce Scope 1, 2 and 3 CO2 emissions from its operations, the energy it buys, and its suppliers. In parallel, employee engagement rose 16 percentage points since 2020; and last year the company supported 87 community projects.

Ultimately, success was achieved because Cinven empowered management to lead, and management maximized Cinven’s support.