KKR backs Chinese pet food company in cross-border push

The firm’s investment was made through its $1 billion 2010-vintage China Growth Fund, which is almost fully deployed.

Private equity giant KKR has made an investment in Chinese pet food company Gambol Pet Group, according to a statement.

Financial terms of the transaction were not disclosed but KKR said the deal was structured through its China Growth Fund, which closed on $1 billion in 2010, and is nearly fully deployed. The fund has generated a gross IRR of 14.2 percent and a net IRR of 7.8 percent, according to KKR's latest annual report.

KKR’s investment will be used to further expand Gambol’s production capacity in key markets including China, Thailand, Europe and the US, as well as to ramp up its best practices in areas of food safety and security.

Commenting on the transaction, Chris Sun, director at KKR China, said in a statement: “Gambol is well-positioned to capture new opportunities in the pet food sector globally and in China given Gambol’s extensive industry expertise, product innovation capabilities and long-term commitment to producing safe, high-quality pet food. We look forward to working alongside this experienced and capable management team to build a true industry leader in the emerging pet market.”

Headquartered in Shandong province in China, Gambol provides pet food products and is one of the largest pet food manufacturers in Asia with six facilities in China and one in Thailand. Gambol sells pet food products in China via its “Myfoodie” brand, through both online and traditional retail channels. The company is also currently the largest private-label provider of pet treats to Walmart.

KKR, with nearly $130 billion in assets under management, has invested around $3 billion in equity in China across several asset classes as of August 2016. Among its investments are dairy producer Modern Dairy, integrated pork company COFCO Meat and electronic company Qingdao Haier.

KKR is also in the process of raising capital for its third pan-Asia fund targeting $7 billion.