St. Petersburg based pet products distributor “Ivanko” acquires 100% of “Cats & Dogs” pet-shop chain

Cats & Dogs
Cats & Dogs

The St. Petersburg distributor and manufacturer of pet products GK “Ivanko” (owns pet-shop chain “Le’Murrr”) consolidated 100% of “Cats & Dogs” pet-shop chain. A year and a half ago, the company has already bought 70% of the retailer from its founder billionaire Igor Sosin. At the end of this year “Ivanko” can become the largest operator in the retail market of pet products. Information about the transaction confirmed by Peregrine Capital managing partner (exclusive Advisor “Ivanko”) Nikolay Gabyshev. He noted that the deal was closed in February of this year.

In December 2015, “Ivanko” has already acquired 70% of Cats & Dogs. The experts evaluated the package at 200 million rubles. The other 30% remained with a private person (name not disclosed), with whom negotiations went on for over a year. Afterall it was the first major M&A deal in the Russian market of pet products. Previous notable deal in the pet sector was the acquisition of a controlling stake in two of the three largest pet-shops chains “Beethoven” and “Zoobum” (formerly called “38 parrots”) by Prometheus Capital Partners fund in 2010.

Mr. Sosin has established Cats & Dogs (the legal entity called “Pet”) in 2004, together with Roman Lipetsky and Alexander Kuchinsky. Today it includes 31 stores in Moscow and Moscow region. 2015 Cats & Dogs revenue amounted to 1.4 billion rubles, net loss — 252,3 million rubles. And in 2016 the chain’s turnover fell to 1.3 billion rubles (excluding VAT). Given that the combined cumulative loss of network Cats & Dogs in the 2010-2015 period exceeded 950 million rubles, “Ivanko” could get Cats & Dogs for debt.

GK “Ivanko” was created in 1996 and started off with the sale of animal feed market in small pavilions. Later, the company became the exclusive distributor for foreign feed and launched its own production of pet products. “Le’Murrr” chain was founded in 1997 and now it consists of 152 store as listed on the retailer’s website.

In 2016-2017 “Le’Murrr” became the leader in investment activity and rate of organic growth. In the second half of 2016 and the first four months of 2017, the network has grown to 65 stores, with revenues compared to last year increasing more than 1.5 times and exceeding RUB 2.8 billion. At the end of last year “Ivanko” ranked third by revenue among pet product retailers (after “Four paws” and “Beethoven”), and by the end of 2017 can compete for first place with total revenue approaching 5.3 billion rubles.

The Russian market of feed and products for animals in 2016 have increased by 14.2% to 166,9 billion rubles., estimated by Euromonitor. This year it’s predicted that the market will increase by 14% to 190.4 billion rubles. While in volume terms sales of pet products are growing slower: last year it increased by just 1%, to 602,4 thousand tons. By the end of 2017, the growth may accelerate to 1.3% and reach volume 610,5 thousand tons.

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