General Mills, the leading US food producer, has expanded into the natural pet food space with the acquisition of Blue Buffalo, in a deal that has an enterprise value of approximately $8.0 billion.
Founded in 2002, Blue Buffalo is described as a fast-growing major pet food company that markets natural foods and treats for dogs and cats under the Blue brand. Blue is claimed to be the number 1 “wholesome natural pet food brand” in the US, reporting $1.275 billion in net sales and $319 million in adjusted EBITDA for the 2017 fiscal year.
General Mills said the transaction established it as the leader in the US wholesome natural pet food category and would accelerate its portfolio reshaping strategy.
“The addition of BLUE to our family of well-loved brands provides General Mills with the leading position in the large and growing Wholesome Natural pet food category and represents a significant milestone as we reshape our portfolio to drive additional growth and value creation for our shareholders”, said General Mills chairman and chief executive officer, Jeff Harmening. “We are competing more effectively in our existing categories by really listening to consumers and providing a variety of options that meet their needs. In pet food, as in human food, consumers are seeking more natural and premium products and we have tremendous respect for how attentive Blue Buffalo has been to the needs of their consumers, pet parents and pets, as they have built their brand”.
Source: General Mills