Private Equity Within Food & Beverage
Grant Thornton reports that there has been a notable increase in private equities share of deals within F& B in Q3 2021 of 32 deals announced44% involved PE, a significant increase compared to 33% in Q2. In particular, overseas investments in the UK in Q3 2021 rose to 44%, compared to 30% in Q2, showing that foreign investors see increasing potential in UK-based food companies. For example, UK-based cereal bar maker Halo Foods has recently been sold to US-based Peak Rock Capital, with its main product, Skinny, low-calorie snack bars expected to be brought to the US market. A key attraction for F& B companies for PE investment is to consolidate their current products and produce new product ideas to remain competitive in their existing markets. This is reflected by the fact that more than 50% of PE transactions in the F& B industry are bolt-on transactions to existing PE-backed food platforms, representing further examples of PE acting as consolidators in the food space.
Sentinel Capital Partners The Guys Love Quick Bite On New York Street
Founded in 1995, Sentinel Capital Partners is a lower middle-market private equity firm based in New York. Food and restaurants are among the firms important sectors. Besides buyouts, restructurings, divestitures, acquisitions of family businesses, and going-private transactions, the firm also invests in special situations including balance sheet restructurings and modest operational turnarounds. It seeks businesses with attractive prospects and high-quality management teams who are interested in becoming owners of the companies they operate. Sentinel team has an established record and access to the critical resources growing businesses need with the experience and expertise to execute a wide variety of private equity transactions.
Whether you are an entrepreneur or business executive looking for a financial partner, a business owner considering a sale, or an investor seeking a superior risk-adjusted rate of return, choosing the right private equity partner is an important decision with long-term implications. Sentinel understands that owning a company requires responsible stewardship and that accepting investment capital from others is a tremendous responsibility. Therefore, the firm seeks to be thoughtful and prudent guardians of the businesses it oversees and the capital it manages. The firm makes decisions based on consensus and collaboration, believing that its professionals bring unique perspectives and meaningful experiences to the table.
Appetite For Acquisition: How Can Small Food And Beverage Manufacturers Stand
Consumer appetites are evolving fast and certain food and beverage sectors continue to grow. People are demanding clean products with minimal ingredients and clear labeling. They search for products that are gluten-free, chemical-free, organic or non-GMO. The big F& B manufacturers like Kellogg and General Mills are not growing because their traditional products do not meet these standards.
To retain market share, strategics are stepping in earlier than ever, to acquire or invest in emerging F& B companies with revenue as low as $20 million. It is cheaper and less risky for them to invest in entrepreneurs who understand the consumers evolving tastes and go-to-market strategy, rather than spend millions internally on R& D that proves to be unsuccessful. Similarly, private equity and venture capital firms are also are stepping up to help emerging brands gain market share while they receive high returns on investments.
How does a F& B entrepreneur position their business, to be attractive to investors and strategic buyers? The entrepreneur needs an in-trend product, an effective marketing approach and scalable manufacturing capabilities to meet growing demand.
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Top Venture Capital Funds For Food And Beverage Industry
For those who are struggling to find venture capital funds who are investing in Food and Beverage industry we prepared a small list. Yes, its not a full global list of Food and Beverage VCs. Please drop us a comment if you think we should add something in to this list. I hope it will grow organically!
1. First Beverage Group company is based in Los Angeles and are successfully working since 2005. Company has some requiremnts for clients. First of all, revenues has to be of $1 million to $10 million, strong and sustainable gross margins and business related to beverage industry. Company is ready to invest between $1 million and $10 million. First Beverage Group already made some successful investments into such project like Project Juice, Essentia and Drizly. Company, which requires for investment has to be based in United States.
2. Khosla Ventures mainly invest into technology and innovative projects. Company takes serious measurement before making investment decision. Khosla has two different funds: seeds and main fund. First fund is suitable for innovative, crazy ideas which probably will work in the future. Second one, is for ideas with lower risk which can be divided by investors and start-ups.
7. 2X Partners company focus on food, beverage, personal care, home care, pet care and other industry investments. Investors only invest into companies with $1mm $15mm revenue range. Company is based in Chicago, United States.
Cic Partners The Grown
Founded in 1983, CIC Partners is a middle-market private equity firm based in Dallas, Texas. The firm prefers to invest in growth-oriented companies primarily in the food & restaurant, healthcare, and energy industries through means of buyouts, recapitalization, and growth capital. CIC looks for opportunities where it can leverage the collective experience of its investment team and its Operating Partners, who are successful CEOs and entrepreneurs, to guide, support, and add value to portfolio companies. The firm aims to bring vertical industry expertise and senior-level relationships with decision-makers and top-tier operators within its core industries.
With the experience of over 25 years, the firm strives to generate wealth by creatively leveraging the investment and operational experience, expertise, and success of its partners. Its strategy is to identify talented owner-operators and management teams whose companies present compelling opportunities for growth with the investment thesis centered on alignment and partnership with operators. CIC is often the partner of choice for successful owner-operators looking for financial and industry expertise and guidance as part of their overall growth strategy. Its flexibility allows it to invest as majority and minority investors.
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Most Active Restaurant Private Equity Firms In North America
Canadian PE firm Claridge has a record of investing in companies across several sectors, from entertainment to food. It sold its stake in Prime Restaurants, one of the largest operators in the Canadian casual dining industry, in 2000. In July 2017, it announced the sale of one of its portfolio companies, Les Plats du Chef Inc., to Texas-based C.H.Guenther & Son Inc. Terms of the deal, which includes three of the frozen food manufacturers plants in Quebec and Ontario, were not disclosed.
Luxury conglomerate LVMHs private equity arm, L Capital, had historically invested in brands in Europe and Asia when it began to contemplate expanding into the US. Meanwhile, its counterpart was contemplating expansion into Europe and Asia. So, in January 2016, the two merged to become L Catterton, the largest consumer-focused investment firm in the world. Since its founding in 1989, Catterton has grown to $5.5 billion in equity capital to deploy through leveraged buyouts and growth investments. The company has invested in a slew of well-known American restaurant chains over the years, including P.F. Changs, Baja Fresh, and First Watch. It also holds stakes in fast-casual chains Noodles & Company and Chopt.
KKR is an American multinational private equity firm, specializing in leveraged buyouts, headquartered in New York City. In 2014, the firm invested in Californias Lemonade, to accelerate the chains continued expansion. Terms of the transaction were not disclosed.
Private Equity In The Food And Beverage Space
| FEATURE | PRIVATE EQUITY
Financier Worldwide Magazine
Although not a unique phenomenon, the food and beverage sector does appear to have been somewhat recession-proof amid the global economic downturn of recent years. This durability, set alongside a gradual but definite shift in eating and drinking habits, has led to the food and beverage sector being singled out as having huge growth potential, whetting the appetite of private equity investors interested in doing deals.
According to analysis by Grant Thornton, 35 transactions involving private equity investors took place in 2014, either investing in the UK and Ireland or acquiring UK assets from overseas. This activity represents an 84 percent increase on the volume of investment seen in 2013. As far as 2015 is concerned, there have been a number of sizeable transactions. These include the sale of Adelie to HIG Capital Europe, the £219m acquisition of France-based refrigerated pastry dough manufacturer Cérélia by IK Investment Partners SAS, and the £144m acquisition of Italian sponge cake manufacturer by CapVest, part of its buy-and-build campaign for investee company Valeo.
A palatable proposition
Private equity, says Mr Griffith, is particularly attracted to branded offerings, many of which have been neglected by the large food groups.
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Shore Capital Partners Closes Food & Beverage Fund Ii At More Than $290m
Strategic Chicago-based private equity firm Shore Capital Partners announced a close for its Food & Beverage Fund II oversubscribed at more than $290 million.
This closing of $291.75 million lifts total capital committed to $3 billion for Shore Capital, which also has offices in Nashville and focuses on microcap investing within the Food & Beverage, Healthcare, Business Services, and Real Estate spaces.
Led by Justin Ishbia, the founder and managing partner of Shore Capital Partners, along with partner Richard Boos, and principals Tom Smithburg, Jeff Smart, and Jeff Smith, F& B Fund II will continue to engage in the successful investment strategy implemented by Ishbia and Boos, committing capital primarily in food & beverage manufacturing, distribution, packaging, and related B2B service companies with revenue landing between $5 million $100 million.
F& B Fund IIs portfolio currently includes Moesle Meat, a specialty distributor providing beef, poultry, pork, and seafood to independent grocers, food service, and retailers throughout the U.S. Midwest Old World, a producer of custom blended spices, seasonings, and ingredients, and BevSource, an outsourced beverage solutions provider based in St. Paul, Minnesota, among others.
We are grateful and proud to have the continued support of our limited partners and are pleased to have successfully closed our second food and beverage fund, said Ishbia.
Most Active Restaurant Private Equity Firms In The Middle East & Africa
Fajr Capital is a major player in Middle East private equity investment, specializing in early venture, mezzanine, growth capital, buyout, and infrastructure investments in companies operating across diversified sectors. Fajr acquired Cravia Group, which is based in the UAE, in May 2016. Cravia operates across the MENA region and includes some of the most recognizable F& B franchises around the world: brands such as Cinnabon, Seattles Best Coffee, Carvel ice cream, Five Guys and Zaatar w Zeit. Currently, Cravia has 85 restaurants and employs more than 1,500 people. Fajr Capitals investment will allow for continued growth in the companys established markets and movement into new markets in the MENA region.
Global Capital Management LTD is a division of Global Investment House, founded in 1998 and headquartered in Kuwait. In December 2016, Global bought Yum Yum Tree through PE funds managed by the company. This acquisition gives our clients unique access into a growing sector which is resilient to economic downturns, CGM managing partner Sulaiman Al-Rubaie said in announcing the deal. Today, Yum Yum Tree operates across Bahrain, the UAE, Qatar and Saudi Arabia. The company operates more than 20 international and regional brands including Vanellis, Subway , Teryaki, Pad Thai, and Al Mangal.
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Private Equity Snaps Up The Food And Beverage Market
New research from leading business and financial adviser Grant Thornton UK LLP finds that private equity activity in the food and beverage deal market has increased in the third quarter of the year.
Of the 32 deals announced in the quarter, 44% involved PE, a significant increase compared to 33% in Q2.
Grant Thorntons latest Food and Beverage Insights finds that total deal value for PE in Q3 has also increased, up from £1.98billion in Q2 2021, to £3.7billion. The deal value this quarter though was notably inflated by PAI Partners acquisition of PepsiCo Inc. Excluding this, the total disclosed deal value involving private equity for Q3 was £1.3billion.
Overall, the research finds that deal activity remained stable in Q3 2021 with 32 transactions announced or completed, compared to 33 in Q2 2021.
Quarter-on-quarter reported deal value also remained steady at £3.8billion, with the three largest completed deals driven by PE.
Cross-border deals dominated the market in Q3, accounting for 56% of activity compared to 49% in Q2. In particular, overseas investments in the UK rose to 44%, compared to 30% in Q2, showing that foreign investors still see potential in the right UK opportunities.
Commenting on the findings, Head of Food and Beverage, Trefor Griffith, Grant Thornton UK LLP, said:
Manna Tree Partners The Health Watcher On The Top Of The Mountain
Founded in 2018, Manna Tree Partners is a private equity firm based in Vail, Colorado. Manna Tree team lives the values of improving human health and invests heavily in growth-stage companies that provide food & beverage, personalized nutrition, food and nutritional ingredients, food production, and consumer products, which makes a positive impact on human health through nutrition. In todays rapidly changing food industry, the firms founders support non-profit research and programs through partnerships with leading research on nutrition across consumer products. It believes the future food system wont be improved through capital alone, but elevating standards across the industry will further accelerate change.
Manna Tree leverages its operating experience and surrounds founders with resources to professionalize their operations and ensure production can keep pace with growth. Portfolio companies are positioned to attract large strategic investors due to the integrative supply chain approach and commitment to healthy ingredients. The firm relies on the expertise of its deep technical and financial networks to source deals, evaluate transactions, and prepare portfolio companies for meaningful and successful exits. It partners with Advisors that are well-versed in agricultural markets, supply chain logistics, consumer packaged goods, private equity investing, leadership development, family enterprise strategy, strategic M& A, operations, and more.
Rise In Premium Pet Food
Another interesting surge in deal activity within F& B concerns the subcategory of pet food. Pet ownership in the UK has jumped from 41% to 59%, largely due to people adapting to the pandemic lifestyle. This has led to more consumers increasingly seeking diversified foods for their furry companions. Recently, UK-listed 3i Group has acquired a majority stake in premium pet food manufacturer MPM from London-based private equity firm ECI Partners in a deal valued at £125m. CapVest has also purchased Inspired Pet Nutrition from L Catterton. Inspired Pet Nutrition provides a new wet dog food facility, a super-premium baked dog food facility, and a state-of-the-art distribution center. Harringtons, one of IPNs major brands, has jumped from #6 to #1 in the market for dry foods for dogs during L Cattertons management. This trend is also seen in the US, where the American Pet Products Association reports that 35% of pet owners are spending more on pet foods in 2020 than in 2019, with an there has been an 11% spending increase. Another firm, Nulo, a Texas-based pet food company that focuses on health enhancing pet foods, has been acquired by Apax Partners to expand into the European markets.
Financial Assistance For Ontario’s Food And Beverage Processors
The provincial government and the Ministry of Agriculture, Food and Rural Affairs work together to help grow Ontario by providing food and beverage processors with funding programs that support good jobs, attract investment, and help them make an even greater contribution to Ontario’s economic success.
Other government ministries and industry groups also provide funding programs and other services to support Ontario’s food and beverage processors. Links to these programs are available on our Funding Programs and Support page.
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Keystone Capital The Bakery Store Helpers Across The Chicago Main Street
Founded in 1994, Keystone Capital is a private equity firm headquartered in Chicago, Illinois. With professionals distinguished by the strong investment experience and substantive operating knowledge, the firm seeks to invest in food & beverage and many other niche industries. It creates true partnerships with the talented management teams of the companies it acquires, playing a significant supporting role to help each business continue to grow profitably. Keystone also offers the strength and security of a very few, but dedicated banking relationships. This means the firm brings access to reliable capital in uncertain economic times, and financial support that comes with a partnership mindset.
Keystone is single-mindedly focused on working hand-in-hand with business leaders to create long-term value. Investing in long-term capital affords the firm tremendous flexibility that provides it with a risk-return profile in sync with management and allows it to make decisions based on long-term goals while forging true partnerships with its management teams through good times and bad. Its partnership approach extends to third-party service providers. The firm has steadfast, long-standing banking relationships providing it strength, security, and reliable financial support, even in uncertain economic times.
New Private Equity Firm Eyes Foothold In Food And Beverage Space
JUPITER ISLAND, FLA. Alan D. Wilson, retired president and chief executive officer of McCormick & Co., Inc., and John Yamin, former CEO of Aryzta Americas, are part of a board of special advisers for a newly formed private equity firm focused on growing branded consumer products in the food and beverage space.
Jove Island Capital will be led by Marc Pinto as co-chief executive officer and director and by Gregory D. Johnson as co-CEO, chief financial officer and director.
Mr. Pinto was a portfolio manager at Janus Henderson Investors for 26 years. As lead portfolio manager for the Janus Twenty Fund, Janus Henderson Growth and Income Fund, and Janus Henderson Balanced Fund, he is a repeat winner of the Lipper Refinitiv Award in the multi-asset category. Earlier, he was an associate in the investment banking division at Goldman Sachs Co., where he advised a number of consumer brands, including Anheuser Busch and PepsiCo, Inc.
Mr. Johnson has more than 27 years of investment experience, most recently as a portfolio manager at American Funds/Capital Group. Earlier, he worked as an investment analyst at American Funds/Capital Group. In addition, he has served on several internal boards at Capitol Group.
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