Yellow Wood Partners has completed fund raising for Yellow Wood Capital Partners II LP. The new fund was oversubscribed and closed with $370 million of committed capital.
“The successful completion of Fund II is an important milestone for Yellow Wood,” said Dana Schmaltz, the firm’s Founding Partner. “It is our belief that overachieving our targeted fund raise supports the strategy we set out to implement six years ago, to build a firm that invests and manages brands as operators who have built, and not just invested behind, consumer brands. Our small group of sophisticated limited partners are true partners in this strategy as we have sought to form a stronger alignment of our interests.”
According to Yellow Wood, Fund II will pursue the same investment strategy it has employed since inception – investing in consumer brands and companies that operate in the mass, drug, food, specialty, club and e-commerce channels and have revenues between $30 million and $200 million. Categories of specific interest include beauty and personal care; health and wellness; household, food and beverage; and pet care. It is expected that Fund II will invest from $50 million to $150 million of equity in up to five platform companies.
“As our success with PDC Brands shows we believe there is a great opportunity to build a limited number of great portfolio companies where our team can enhance the success of consumer brands to drive exceptional returns for our investors,” added Mr. Schmaltz.
Earlier this month, Yellow Wood sold PDC Brands, a collection of beauty, personal care, and wellness brands, to CVC Capital Partners for just over $1.4 billion.
PDC Brands, acquired by Yellow Wood in September 2012, has a portfolio of many category-leading brands across the wellness, haircare, beauty and cosmetics, fragrance, bath and body, and salon professional markets. During Yellow Wood’s term of ownership, five add-on acquisitions were completed which gave PDC nine additional brands. These acquisitions, along with organic growth, resulted in a quadrupling of revenues and a five times growth in EBITDA. PDC Brands was formerly known as Parfums de Coeur, Ltd. – which was founded in 1981 – and changed its name to PDC Brands in March 2015. Today, PDC is headquartered in Stamford, CT with an additional office near London in Hayes, UK (www.pdcbeauty.com).
“We start Fund II with a strong pipeline of investment opportunities,” said Tad Yanagi, a Partner at Yellow Wood. “Over the last five years we have continued to expand our outreach to entrepreneurs as well as to the financial community that understands how Yellow Wood can bring our combined operating and investment experience to acquire and grow consumer brands. We look forward to working with skilled management teams to drive the transformation of new businesses into growing global consumer products companies that appeal to consumers across all distribution channels.”
Yellow Wood was founded in 2011 and is based in Boston (www.yellowwoodpartners.com).
Park Hill (www.parkhillgroup.com) was Yellow Wood’s placement agent for certain of Fund II’s limited partnership interests.
© 2017 Private Equity Professional | July 31, 2017