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August 25, 1997 02:00 AM

PET PRODUCTS MOLDERS MERGE INTO TOP DOG

Bill Bregar
Senior Staff Reporter
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    A California venture capital firm is merging two leading pet products molders, doghouse producer Dogloo Inc. and Doskocil Manufacturing Co. Inc., the largest maker of pet carriers, to create a $175 million company.

    Both companies are the largest in their markets, said Charles Martin, managing partner of the investment firm, Enterprise Partners of Newport Beach, Calif. Dogloo and Doskocil combined will be ``the largest nonfood pet products company in America,'' Martin said. He did not have market share numbers.

    Doskocil's annual sales are about $115 million, Martin said. Sales at Dogloo are $60 million.

    Enterprise Partners, Dogloo and Doskocil have not formally announced the merger, but Martin, in an Aug. 18 telephone interview, confirmed two newspaper and trade magazine reports on the deal.

    As a result of the merger, Dogloo and Doskocil will undergo consolidation, as Dogloo's headquarters and sewing factory in Corona, Calif., probably will be moved into Doskocil's plant in Arlington, Texas, Martin said.

    The deal makes the combined company ``a significant player'' not only in pet products, but in injection and structural foam molding, said Larry Rembold, Doskocil president and chief executive officer since July, when Enterprise Partners bought 75 percent of the firm.

    Dogloo officials refused to comment on the merger. The molder is best known for its igloo-shaped doghouse, the Dogloo. It sells about 1 million pet shelters a year in more than 40 countries.

    Dogloo was founded 10 years ago by two Southern California plastics designers, Aurelio F. Barreto III and Darrell R. Paxman. The pair first opened shop in Corona, and Dogloo began its own structural foam molding in 1994, building a factory in Indianapolis. The company makes doghouse shapes besides the igloo, such as log cabins.

    Privately held Doskocil, based in Arlington also makes doghouses, but is strongest in pet carriers. The firm also makes resin outdoor furniture and sporting goods products.

    The proposed merger has been cleared by the government for potential antitrust problems, Martin said.

    ``This merger is on a track towards closing, probably within the next 30 days,'' he said.

    Enterprise Partners acquired a 14 percent stake in Dogloo about a year-and-a-half ago, at the same time, an affiliated California investment group, Westar Capital, bought 54 percent of the firm. Martin also serves as a general partner of Westar.

    Westar also provided a significant amount of money for the Doskocil July 1 acquisition. The new owners bought the Texas pet products molder from the husband-and-wife founders, Ben and Mary Doskocil. The Doskocils retain 25 percent interest in the company, and Ben Doskocil will serve on the board of directors, according to Martin.

    Doskocil was founded in the early 1960s.

    At Dogloo, co-founder Barreto resigned as top executive this past June. Currently he serves on the board and remains a significant shareholder.

    Barreto and his wife, Peggy, created the distinctive igloo doghouse. Paxman, the other founder, has no involvement in Dogloo.

    This fall, Dogloo will launch its first consumer advertising program in national magazines and on television.

    A few years ago, Dogloo sued Doskocil for patent infringement over an igloo-shaped doghouse that Doskocil introduced. Martin, of Enterprise Partners, said that lawsuit was settled.

    He said some common product lines will be consolidated, but the owners have not decided how to integrate the names of the two companies.

    Rembold, who was a consultant for Enterprise Partners' acquisition of Doskocil, formerly was president and CEO of Dolco Packaging Corp., which makes thermoformed polystyrene food packaging. He left to become a consultant when Dolco was sold in early 1996.

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