The private investment arm of the Ontario Teachers’ Pension Plan plans to buy the largest manufacturer of private label pet food in the U.S. for $1 billion, or US$840 million.

Based in Brentwood, Tennessee, Doane Pet Care Co. is the largest manufacturer of private label pet food in the U.S. and serves many top pet food retailers in the U.S., Europe and Japan.

“We are extremely pleased with the opportunity to invest in a market-leading U.S. company,” said Jim Leech, senior vice president, Ontario Teachers’ Pension Plan, in a release. “The U.S. is a key market for us, and we look forward to working with Doane’s excellent management team to help grow this business.”

Doug Cahill, Doane Pet Care President and CEO, believes the new ownership structure will enable the company to further develop its global business and U.S. market position.

“Teachers’ Private Capital has a rich history of investing in strong companies with excellent long-term growth prospects and we are delighted with their recognition of our tremendous potential as well as our achievements in building Doane to its premier market position,” said Cahill.

“With the long-term commitment and financial stability provided by Ontario Teachers’, we have a unique opportunity to offer an even higher level of product innovation and marketing support to help new and existing customers build their brands.”

The transaction is expected to close by mid-November. Lehman Brothers acted as Ontario Teachers’ financial adviser on the transaction.

The Ontario Teachers’ Pension Plan, which invests on behalf of 255,000 active and retired teachers in Ontario, is worth about $88 billion. With more than $7 billion in assets, Teachers’ Private Capital is one of North America’s largest private investors.