Personal & Household Goods
VMG Partners has acquired a controlling stake in Waggin' Train LLC, which sells all-natural, all-meat dog treats and hopes to grow by expanding further in grocery and specialty pet stores.
Company founders Chris and Gena Weinberg are retaining a minority stake in the company and members of the senior management team are investing equity as well. Additional terms were not disclosed.
Based in Anderson, S.C., Waggin' Train sells dog treats including whole-meat Chicken Tenders, all-meat Freshies Dental Bones and liver-filled Meat Blast Porkhide Twists. The company is on pace for around $90 million in sales this year, a 50% boost from $60 million last year. The company maintains a distribution facility in Corona, Calif., where it receives the products from China.
Growth this year has been propelled by the addition of a new management team, led by Chief Executive Jerry Peters, with deep experience in distributing branded packed-good products, said Kara Cissell-Roell, a principal at VMG Partners.
In fact, it was Cissell-Roell's relationship with Peters that initially led to the deal. While with the Shansby Group, now known as TSG Consumer Partners, Cissell-Roell had attempted to buy Peter's former company, which made the cleaning product Greased Lightening.
That deal never took place, but Cissell-Roell did meet with Peters after he took the helm of Waggin' Train earlier this year, after which the buyout firm decided to pursue a deal.
VMG Partners liked Waggin' Train's brand strength in a fast-growing segment of the pet-treat category. While the overall pet-treat market, estimated at $3 billion a year, was growing at around 10% annually, the all-natural category was growing at around 45%, Cissell-Roell said, as dog owners look for healthy treat alternatives for their companions.
Waggin' Train currently also has the highest market share in the all-natural pet treat segment at mass retail and club stores, the main markets it sells into, Cissell-Roell said. The company hasn't made a strong push into grocery or pet retail outlets, which is where VMG Partners sees potential.
It will try to expand its products' reach by getting them into customers' hands, whether through mailings or by attaching samples to other pet products. From there, Waggin' Train hopes that 95% of dog owners can become repeat purchasers of their treats.
"By generating the trial, we're getting the brand awareness so that they'll go the shelf and buy the product," Cissell-Roell said. "Once the consumer tries the product, you have a consumer for life."
Waggin' Train also hopes to introduce new flavored treats but has no immediate plans to begin rolling out treats for other animals, like cats, Cissell-Roell said.
The deal represents VMG Partners' third in as many months, after acquiring a majority stake in the mineral makeup company Colorescience in October and a minority stake in the tea company Mighty Leaf last month.
The firm is currently investing a $325 million fund, VMG Equity Partners LP, which was raised in June.
BMO Capital Markets was financial adviser to VMG Partners and lead arranger for the senior debt financing. Churchill Financial also provided senior debt and Babson Capital provided a mezzanine tranche.
Reach VMG Partners at 415-956-0496.