Eurazeo [EPA:RF] has tapped Rothschild to sell Ultra Premium Direct, a French pet food producer, two sources familiar with the situation told this news service.

The process is expected to kick off in the second quarter of this year, one of the sources said.

According to a French press report, Ultra Premium Direct registered EUR 38.8m of turnover in 2022. On its profile on a public administration’s hiring platform, it says Ultra Premium was expected to achieve a turnover of EUR 55m for 2023.

Companies operating in the sector usually register EBITDA of between 10% and 15%, one of the sources said.

The business’ subscription-based model makes it particularly attractive as recurring revenue means more stability, the second source said. Direct sales via online subscriptions represent more than half of Ultra Premium Direct’s sales, according to Eurazeo’s webpage.

Potential suitors, however, will be assessing the potential to expand the business from its online base and outside of France, the first source said.

Ultra Premium owns an R&D and production site in Agen, south of France, and has stores in Montauban, Pau, Bordeaux, Rennes, Toulouse, Paris and Caen, as per the company’s website.

Eurazeo acquired a majority stake in Ultra Premium Direct through its division Eurazeo Brands in 2021 for EUR 68m, as reported. Co-founders CEO Matthieu Wincker and managing director Sophie Wincker, as well as French venture capital firm Eutopia via its Otium Consumer fund hold a minority stake.

In 2021, MD at sponsor Eurazeo Brands told Mergermarket that the company generated around EUR 25m in annual sales and was confident that it could quadruple those sales by the time an exit is considered in three to five years.

Ultra Premium Direct has an LTE score of 19 according to Mergermarket‘s Likely to Exit (LTE) predictive algorithm.*

Established in 2013, Ultra Premium Direct entered French Tech Next 120, a government initiative to support promising French start-ups, in 2021, as per an official press release.

Eurazeo, Rothschild and Eutopia declined to comment. Ultra Premium Direct did not respond to several requests for comment.

* Mergermarket’s LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.