Mount Maunganui-founded pet-food maker Ziwi has entered an agreement to be bought by FountainVest Partners - a Chinese venture capital firm based in Hong Kong.
Ziwi managing director Richard Lawrence confirmed the sale in a statement to the Herald this afternoon, following speculation this morning that his company had retained PwC to manage a sale process - which had seen FountainVest in a bidding war with a second Chinese fund, Boyu.
Bidding is understood to have topped $1 billion in a market where worldwide lockdowns have seen a boom in cat and dog ownership as people acquire so-called "comfort pets".
Lawrence confirmed PwC's role. He had no immediate comment on the price, but did confirm the deal is subject to Overseas Investment Office approval - implying it is somewhere north of the agency's $100 million threshold.
Lawrence said the deal would help his company expand internationally.
"This investment will build on the current team's successful strategy and plan to meet strong global demand for Ziwi's product range, with new jobs and exciting career opportunities to be created in New Zealand and internationally over the long term," he said.
He added, "It will be business as usual for staff. The management team will continue to lead the business, with executive management reinvesting back into the business."
Ziwi was founded in 2002 by Tauranga man Peter Mitchell. Its upmarket, air-dried dog and cat food typically sells for more than $50 a kilo under its Ziwi Peak brand. Animates has a 4kg bag of Ziwi Peak Daily Dog Cuisine Chicken selling for $193.49.
Today, Mitchell holds a 6 per cent stake in the company. The largest shareholder is former Ebos director Mark Stewart, the son of Sir Robertson Stewart, the founder of Christchurch plastics manufacturer PDL who died in 2007. PDL had revenue of around $350m when it was sold to French giant Schneider in 2001.
The remaining shareholders are managing director Richard Lawrence, with a 9 per cent stake and Bay of Plenty-based director Nigel Wood.
Sale rumours first emerged last October, when it was said Ziwi was on the block for around $400 million - at which point NZX-listed Ebos (which already owns the Black Hawk Masterpet pet food brands), alongside multinationals Nestle and Mars, was said to be a prospective trade buyer, as well as Chinese dairy giant Yili Group.
When reports of PwC's appointment emerged in August, KKR was said to be the early favourite, with two other PE firms, Pacific Equity Partners and The Carlyle Group, also said to be in the running, along with Yili.
Ziwi, which sells primarily across Australia and New Zealand, but also has sales teams in the US and Asia, generates operating earnings of around $50m, set to increase to $70m in two years, according to a report in The Australian.
Last year, Ziwi was fined $66,000 over odours from its Mount Maunganui plant that were so putrid they left some of those affected feeling "physically ill".
The company previously pleaded guilty to a representative charge under the Resource Management Act of discharging a contaminant from an industrial or trade premises into the air on five occasions in 2018.
Size of four rugby fields
Shortly before the ruling, Ziwi revealed plans to build a new state-of-the-art (and odour-free) plant in Napier.
This afternoon, Lawrence elaborated, "Production from Ziwi's current three Tauranga sites will shift to a new $85m state-of the-art production kitchen in Awatoto (Napier) from early-mid 2022."
The 12,000 square metre kitchen will be approximately the size of four rugby fields and be capable of doubling Ziwi's production over its current three Tauranga sites, the MD said.
"The kitchen will also add processing capability and technology to support the development of new product lines, which will ensure Ziwi maintains its global leadership in the premium air-dried category."
Lawrence said once the kitchen, when at full production by late 2022, will employ around 120 people across the Napier-Hastings region and ship 1000 containers per annum through the Port of Napier.