How a $12.3 million investment will impact GFI’s pet business

Global Food and Ingredients (GFI) has entered a definitive agreement to raise $12.3 million (€11.3M) through an investment in equity and debt for its pet food subsidiary Big Sky Milling.

This would include an initial funding round of $11.8 million (€10.8M), followed by an injection of $0.5 million (€0.4M) into the corporation by 35 Oak Holdings, a company shareholder. 

According to a company statement, proceeds are then expected to refinance existing loans by GFI’s core ingredients division and unlock liquidity to invest in the further growth of the operation.

Big Sky was created in 2023 for Toronto-headquartered GFI to transfer all of its pet food ingredients assets and businesses serving the North American pet food industry, aid product expansion and make new investments.

“Under the Pet Food Transaction, GFI will transfer all of the assets and liabilities associated with its pet food ingredients division to a newly formed and wholly owned subsidiary (‘Pet Food Co’),” says the company. GFI will sell a 49.9% equity stake in Pet Food Co to 35 Oak for approximately $3.2 million.

Once the transaction concludes, GFI’s core ingredients division will agree with Big Sky to generate recurring annual revenue of a minimum of $180,000 (€165,500).

Driving the business

GFI recorded revenue of $17.6 million (€16.1M) in the 3 months ending September 2023.

According to company data, plant-based pet food ingredients and 2 other categories—split peas and downstream retail packaged products—accounted for 43.7% of total revenue. The same 3 categories accounted for 40.5% of revenue share for the first half of its fiscal year (FY) 2024. 

In the same quarter, 35 Oak Holdings also cleared a $3.0 million (€2.7M) advance toward the Big Sky transaction.