The purchase of Petsense LLC, a specialty retailer that claims to provide "premium natural pet food from the brands you know and trust and at more affordable prices than those other big city stores," by rural-lifestyle-store chain Tractor Supply Co. (Nasdaq: TSCO), for $116 million in a deal announced Sept. 30, underscores the value that strategic buyers and private equity firms perceive in pets.

Long-time cat owners, we recently added a dog to our family, and the experience has given me some insight into the pet subsector of the consumer and packaged goods industry. Before our puppy Teddy arrived, we went through a classic “nesting” period, during which we bought stuff to make the newborn comfortable. These were one-time purchases: a carrier, a bed and an exercise pen. But now that Teddy is home, he needs a steady stream of food, treats, toys, and training pads – what private equity investors call “recurring streams of revenue.”

I'm discovering that there are quite a large number of recurring expenses for pets, a fact that is not lost on the companies that make food and other products for them. A slew of pet websites offer discounts for “auto-ship,” which provides monthly deliveries of everything from chewable flea- and-tick prevention tablets to Buffalo bully sticks.

“The pet food and snack business is one of the most attractive segments of the consumer and packaged goods industry,” says Daniel O’Connell, CEO of Vestar Capital Partners. Vestar has gotten a lot of attention in 2016 for the $3.6 billion sale of the Sun Products Corp., which makes popular household products, including Snuggle fabric softener, to Henkel Consumer Goods Inc., a subsidiary of Henkel AG & Co. KGaA. But in 2015, Vestar sold Big Heart Pet Brands to the J.M. Smucker Co. (NYSE: SJM) for $5.8 billion. Big Heart makes a wide array of well-known pet food, including Gravy Train, Kibbles ‘n Bits, Meow Mix, Milk-Bone, Natural Balance and 9Lives. Smucker, best known for jam, called the acquisition a “great strategic fit.” Smucker saw Big Heart as fitting in with its “corporate culture of working with families,” says O’Connell.

Another big pet deal that closed in 2015 was Eli Lilly and Co.’s (NYSE: LLY) purchase of Novartis Animal Health, for $5.4billion in cash. The deal expanded Lilly’s Elanco animal health division. It’s Elanco that makes the flavored Interceptor tablets we’ll be giving to Teddy every month to protect him from parasites.

Says Vestar’s O’Connell: “People enjoy having pets and taking good care of their pets.”