(Bloomberg) -- Archer-Daniels-Midland Co., better known for supplying staples from corn to soybeans, is bolstering its bet on a boom in pet-food sales.
ADM agreed to buy a 75% stake in P4 Companies, maker of pet treats and supplements PetDine, Pedigree Ovens, the Pound Bakery and NutraDine, in a deal that values the four enterprises at about $600 million, the company said Wednesday in a statement. The move adds to ADM’s other investments in animal nutrition of Crosswind pet treats in 2017 and pet-food maker Neovia in 2019.
Chicago-based ADM and other companies that make money buying and storing crops have been moving to sell more value-added products to balance returns in the volatile bulk commodities sector. Meanwhile, pet ownership and adoption rates have climbed as the coronavirus pandemic kept people at home. Grains trader Scoular Co. opened its first freeze-dried pet-food ingredient factory in Nebraska last year.
Vince Macciocchi, president of ADM’s nutrition business, said annual global sales of pet good could reach $140 billion by 2026, up from $110 billion in 2021. “We’ve grown to meet that demand,” he said.
ADM will acquire P4 facilities in Illinois and Colorado, with the ability to produce pet products sold in 15 countries. ADM also will have an option to purchase the remaining 25% stake in the coming years.
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