Why private equity just paid $1.3 billion for a cow-tagging company

May 3, 2013
May 3, 2013

BC Partners, a London-based private equity firm, beat out nearly a dozen competitors to acquire Allflex, the world’s leading maker of electronic tags for animals. Allflex was valued at $1 billion in January and sold for $1.3 billion, suggesting an intense bidding process.

The competition to acquire the company follows a series of revelations that horsemeat made its way into ground beef products—such as this Taco Bell burger and these Ikea meatballs—in Europe. The scandal has once again raised concerns about the traceability of meat in the supply chain.

This is not the first time Allflex has been sold following a food-related outrage. Electra Partners, the private-equity film that sold Allflex to BC Partners, originally bought it in 1998, soon after the epidemic of mad cow disease in the 1990s.

There is tremendous room for growth in the animal tagging industry. Only about 30% of the world’s cattle is tagged, David Symondson at Electra told Reuters. And as rules get tighter after every scandal and epidemic, the complexity of the tagging grows, as well. Allflex has gone from making unsophisticated items like plastic tags for cattle to making implants that can go in fish and domestic pets. With new owners, it might get bigger still.

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