The pet-food industry seems like an unlikely business to be a hotbed of dealmaking, but what is really strange about the deals are the combinations.

The most recent deal in the pet-food market is Mars Inc.'s acquisition of Doane Pet Care Enterprises Inc. for an undisclosed price. Only eight months earlier, Teachers' Private Capital, the direct private equity arm of the Ontario Teachers' Pension Plan, bought Doane, a manufacturer of private-label pet food, for $840 million. While Mars is best known for its candy like Snickers and M&Ms, the company also makes Pedigree dog food and Whiskas cat food. In addition, Mars owns a 56% stake in ultra-premium French pet-food maker Royal Canin SA.

In the last year, several pet-food brands have changed hands. Perhaps one of the attractions for consumer products companies is the market's higher profit margins than other food-making businesses.

Most recently, Del Monte Foods Co., which in addition to canned foods also produces 9Lives cat food and Kibbles 'n Bits dog food, last month made two pet-related acquisitions. It agreed to buy Meow Mix Holdings Inc. for $705 million from buyout firm Cypress Group, and Milk-Bone dog biscuits from Kraft Foods Inc. for $580 million.

While Del Monte, Mars and Nestle, which owns Purina, may seem appropriate since producing pet food could be viewed as a natural extension of producing food for human consumption, some of the other combinations seem outright bizarre.

Procter & Gamble owns the Iams and Eukaneba brands of pet foods, but P&G is no longer just a detergents company but rather a fully diversified consumer products maker. However, some of P&G's rivals in businesses like batteries, detergents and toothpaste are also its pet-food rivals. For example, Colgate-Palmolive Co. owns Hill's Science Diet pet food; and Spectrum Brands Inc., formerly Rayovac, produces Nature's Miracle pet-care products and Dingo brand pet toys.

With private equity firms owning most of the independent pet-food makers, more strange match-ups are yet to come. —Matthew Wurtzel

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