• Home
  • News
  • Analysis
  •  
    Regions
    • Australasia
    • Southeast Asia
    • Greater China
    • North Asia
    • South Asia
    • North America
    • Europe
    • Central Asia
    • MENA
  •  
    Funds
    • LPs
    • Buyout
    • Growth
    • Venture
    • Renminbi
    • Secondary
    • Credit/Special Situations
    • Infrastructure
    • Real Estate
  •  
    Investments
    • Buyout
    • Growth
    • Early stage
    • PIPE
    • Credit
  •  
    Exits
    • IPO
    • Open market
    • Trade sale
    • Buyback
  •  
    Sectors
    • Consumer
    • Financials
    • Healthcare
    • Industrials
    • Infrastructure
    • Media
    • Technology
    • Real Estate
  • Events
  • Chinese edition
  • Data & Research
  • Weekly Digest
  • Newsletters
  • Sign in
  • Events
  • Sign in
    • You are currently accessing unquote.com via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0)870 240 8859

      Email: customerservices@incisivemedia.com

      • Sign in
     
      • Saved articles
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
  • Follow us
    • RSS
    • Twitter
    • LinkedIn
    • Newsletters
  • Free Trial
  • Subscribe
  • Weekly Digest
  • Chinese edition
  • Data & Research
    • Latest Data & Research
      2023-china-216x305
      Regional Reports

      The reports review the year's local private equity and venture capital activity and are filled with up-to-date data and intelligence on fundraising, investments, exits and M&A. The regional reports also feature information on key companies.

      Read more
      2016-pevc-cover
      Industry Review

      Asian Private Equity and Venture Capital Review provides an independent overview of the private equity, venture capital and M&A activities in the Asia region. It delivers insights on investments made, capital raised, sector specific figures and more.

      Read more
      AVCJ Database

      AVCJ Database is the ultimate link between Asian dealmakers and those who provide advisory, financial, legal and technological services to the private equity, venture capital and M&A industries. It is packed with facts and figures on more than 153,000 companies and almost 117,000 transactions.

      Read more
AVCJ
AVCJ
  • Home
  • News
  • Analysis
  • Regions
  • Funds
  • Investments
  • Exits
  • Sectors
  • You are currently accessing unquote.com via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0)870 240 8859

    Email: customerservices@incisivemedia.com

    • Sign in
 
    • Saved articles
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
AVCJ
  • Southeast Asia

Deal focus: COPE moves fast with Malaysia petfood play

pet-world-malaysia
  • Justin Niessner
  • 11 July 2023
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Save this article  
  • Send to  

Recognising a local champion in a pandemic-proof category, COPE Private Equity flipped a significant minority stake in Malaysian petfood maker Pet World in just over two years

Within weeks of COPE Private Equity’s investment in Malaysia-based dog and cat food maker Pet World in early 2021, the country went into a nationwide “total” lockdown, which included the so-called MCO, or movement control order. This was the second time a MCO had been declared; the first one ended up lasting almost all of 2020.

The economic damage during this period was severe. Gross GDP declined 5.5% in 2020 and 0.5% year-on-year in the first quarter of 2021. As of the beginning of 2021, the MCOs were said to have wiped out as much as 90% of domestic retail business. But not every segment was underwater.

“The pandemic was a pleasant surprise as many families decided to adopt pets as companion animals while stuck at home, generating a positive tailwind for the pet food industry,” Azam Azman, founder of COPE, said. “As a result, our forecast numbers were realised earlier in 2021-2022.”

COPE, which typically commits USD 5m-USD 15m per transaction, made two investments in Pet World in early 2021 and 2022 from its first and fourth funds. Much of the decision-making was based on having identified the category as defensive through economic cycles and benefiting from local uptake of a global pet humanization trend.

Azam points to industry data projecting the pet food market to grow 7.4% a year Asia-wide until it hits USD 26.1bn in 2026. In Malaysia, growth is expected to be 8.4% a year, bringing the market to MYR 1.2bn (USD 257m) by 2025 on the back of increasing pet ownership and a shift toward higher nutrition products.

“When underwriting an investment, we look for trends that continue beyond a single investment cycle, as potential buyers will, in turn, look for industry tailwinds during their investment period,” he said.

This scenario played out in just over two years with the recent exit of COPE’s entire stake in Pet World to Creador, a fellow Malaysia-based and regionally active PE firm. Creador, which writes cheques in a range of USD 40m-USD60m, acquired a 40% stake, which included COPE’s entire position plus shares owned by the founding family. Financial terms were not disclosed.

In addition to the resilience and momentum of the broader pet industry, COPE attributes the company’s appeal at the time of sale to value-add work around strategic planning, operations, and an expansion of the customer base. This included improvements in branding, product positioning, reporting, and data transparency, as well as enhanced corporate governance guidance and financial controls.

Pandemic-related supply chain disruptions were handled through supplier diversification and the exploration of alternative raw material sources locally. The most important development on this front was the construction of a state-of-the-art factory on the outskirts of Kuala Lumpur. This meant necessitated the recruitment of experienced manufacturing and R&D workers, and even a food nutritionist.

Going upstream was essential. Manufacturing was previously outsourced to overseas players, making profit margins subject to fluctuations in foreign currency. By the end of the pandemic, the ringgit had declined 25% versus the US dollar over a five-year period.

It also opened doors in terms of diversifying the product suite. Some of the standout launches during this period include a duck meat-based kibble from Pet World’s dog line ProBalance, a salmon and grilled mackerel-based variety under the cat brand ProDiet, a tech-savvy cat litter, and a premium cat brand called Delizios, said to be made with “human-grade” tuna.

Shortly after COPE’s second investment last year, Pet World teamed up with SPCA Selangor and Nutrition Technologies to create what was billed as Malaysia’s first sustainable dog food using black soldier fly larvae as an alternative protein source.

“Recognizing the need for ability and flexibility, the CEO focused on diversifying the company’s product portfolio,” Azam said, noting that exploring new product lines and adapting to changing consumer preferences mitigated the impacts of commodity price fluctuations related to ingredients.

“Product rollouts – from market research to formulation, design, marketing, manufacturing, and distribution – were a fun and unforgettable experience for the [COPE] team.”

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Save this article  
  • Send to  
  • Topics
  • Southeast Asia
  • Trade sale
  • Expansion
  • Consumer
  • Malaysia
  • COPE Private Equity
  • Creador

More on Southeast Asia

housing-house-home-mortgage
Singapore fintech start-up LXA gets $10m seed round
  • Southeast Asia
  • 10 Nov 2023
airport-travel
Asia’s LP landscape: North to south
  • LPs
  • 08 Nov 2023
singapore-harbor-cityscape-night
Reed Smith hires Sidley Austin's Asia fund formation leader
  • Southeast Asia
  • 02 Nov 2023
biotech-lab-healthcare-pharma-02
Polaris leads $27m round for Singapore's Engine Biosciences
  • Southeast Asia
  • 01 Nov 2023

Latest News

world-hands-globe-climate-esg
Asian GPs slow implementation of ESG policies - survey

Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...

  • GPs
  • 10 November 2023
housing-house-home-mortgage
Singapore fintech start-up LXA gets $10m seed round

New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.

  • Southeast Asia
  • 10 November 2023
india-rupee-money-nbfc
India's InCred announces $60m round, claims unicorn status

Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”

  • South Asia
  • 10 November 2023
roller-mark-luke-finn
Insight leads $50m round for Australia's Roller

Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.

  • Australasia
  • 10 November 2023
Back to Top
  • About AVCJ
  • Advertise
  • Contacts
  • About ION Analytics
  • Terms of use
  • Privacy policy
  • Group disclaimer
  • RSS
  • Twitter
  • LinkedIn
  • Newsletters

© Merger Market

© Mergermarket Limited, 10 Queen Street Place, London EC4R 1BE - Company registration number 03879547

Digital publisher of the year 2010 & 2013

Digital publisher of the year 2010 & 2013