Falfurrias Capital Partners has closed the first platform acquisition for its fifth fund with the buy of Rice’s Honey from Mission Consumer Capital.
Rice’s Honey (DBA Local Hive) contracts with local beekeepers – from various states and regions throughout the United States – and markets 23 raw and unfiltered honey varietals. According to the company, each of its varietals has its own unique flavor and color based on the region from which it was sourced which is further influenced by pollen variations, seasonality, and weather.
Local Hive’s products are sold in national retail outlets including Albertsons, Safeway, Kroger, Sprouts, Walmart and Whole Foods, as well as through Amazon and other online sellers. According to Falfurrias, local, raw and unfiltered honey is a rapidly growing food segment driven by consumer demand for natural, sustainable, and locally sourced products.
The Local Hive origin story dates to 1924 when L.R. Rice founded Rice’s Lucky Clover Honey in Greeley, Colorado. The family-owned company worked bee yards, extracted honey, filled and labeled glass jars, then sold products door-to-door in Northern Colorado. In 2017, Mission Consumer Capital, along with subordinated debt providers and co-investors Centerfield Capital and Plexus Capital, acquired the business; named food executive Tony Landretti as CEO (he had been a member of Rice’s board since 2013); and rebranded the company as Local Hive.
With the closing of the transaction, Mary-Ann Somers, a former Hershey’s and Coca-Cola executive who serves as an advisor to Falfurrias, will join the Local Hive board of directors along with Partners Chip Johnson and Ken Walker.
“This is a fast-growing segment of the honey category that’s perfectly aligned with today’s consumer trends favoring natural products that are sourced locally and responsibly,” said Ms. Somers. “Local Hive is extremely well-positioned to capitalize on these shifts in consumer preference and build increased market share.”
“Joining forces with Falfurrias will give us tremendous resources to realize our next chapter in the growth of Local Hive,” said Mr. Landretti, who will continue as CEO of the company. “Having access to food industry expertise of people like Mary-Ann Somers will be invaluable, to say nothing of the Falfurrias experience with other food companies like Carolina Foods and Sauer Brands.”
In April 2021, Falfurrias acquired Carolina Foods, a North Carolina-based baker of honey buns, donuts, pies and pastries; and in August 2019, it acquired the food business assets of The C.F. Sauer Company. The Virginia-based company’s regional brands and private-label products include Duke’s Mayonnaise, The Spice Hunter, Sauer’s, Gold Medal, and BAMA Mayonnaise.
Alantra was the financial advisor to Falfurrias on the buy of Local Hive. The Alantra deal team included Managing Directors Jeff Robards, Josh Garver, and Scott Hadfield; Vice President Mike O’Connell, Associate Philip Dytko, and Analyst Matt Gage.
“Local Hive is the clear winner in a transition that is occurring in the retail honey category, from value-oriented, private label products to premium differentiated brands that resonate with consumers,” said Mr. Robards. “Falfurrias is the perfect partner for Local Hive as it accelerates its growth trajectory and sees continued gains in market share, distribution and velocity.”
Falfurrias, headquartered in Charlotte, North Carolina, was founded in 2006 by Hugh McColl Jr., former chairman and CEO of Bank of America, Marc Oken, former CFO of Bank of America, and Managing Partner Ed McMahan. Earlier this month, Falfurrias closed its oversubscribed fifth fund, Falfurrias Capital Partners V LP, with $850 million of capital. The buy of Local Hive is Fund V’s first acquisition.
“Our investment in Local Hive continues our ‘Industry First’ method of identifying markets – like packaged foods – with significant and durable growth potential,” said Mr. Walker. “In Local Hive we’ve found a fantastic partner with a proven track record, a highly differentiated approach, and a strong management team, everything we need to drive future growth.”
Falfurrias makes equity investments in growth-oriented middle-market companies that have EBITDA from $5 million to $40 million. The firm invests across a range of sectors and through its “Industry First” investment strategy is currently seeking investments in packaged foods; private equity-related software and services; fraud and credit risk analytics; finance-related technology-enabled services; marketing, media, and information services; and electric utility supply chains. Numerous other sectors of interest are currently being evaluated by Falfurrias.
Fort Worth, Texas-based Mission Consumer Capital, the seller of Local Hive, invests in branded and private label consumer packaged goods companies that have revenues of $15 million to $150 million and EBITDA of $2 million to $15 million. Control investments are preferred but the firm will also make select non-control investments.
© 2021 Private Equity Professional | September 30, 2021
AUA Private Equity Partners has formed Epic Baking Company to acquire Epi Breads. The buy of Epi is Epic Baking’s first acquisition as it executes a strategy to invest in artisan bakeries that manufacture, distribute or market baking products to the foodservice or retail sectors.
“We are excited to partner with Epi Breads to help accelerate the company’s future growth,” said Steven Flyer, a partner of AUA. “Epi Breads has a long history of supplying leading customers in the foodservice and retail channels. We look forward to working with existing customers and utilizing our network of relationships to provide outstanding customer service, R&D capabilities, implement best-in-class productivity and offer the highest quality products.”
“AUA will bring a number of resources to Epi Breads including capital and operational expertise to bolster Epi’s capabilities, starting with its new 135,000 square foot manufacturing facility in Atlanta,” said Kyce Chihi, a managing director of AUA. “Through AUA and Epi’s new partnership, the company will continue to provide strong customer service through superior product quality and consistency, enhanced product innovation, and a sound balance sheet.”
LongWater Opportunities has held a first closing of its third fund, LWO Fund III LP (Fund III), with $53 million of capital. The firm’s new fund has a target of $100 million.
“LongWater is fortunate to have attracted such a strong team that has worked together for many years to consistently produce outsized returns for our investors,” said Mr. Burgum. “We are appreciative of the support provided to us by our limited partners throughout the challenges brought about by the COVID-19 pandemic, and we are excited about the significant momentum that continues to build at LongWater.”
“We are excited to see investors validating our strategy and believe that reshoring will continue to proliferate in the United States. American workers are the most productive in the world and we are passionate about leveraging American ingenuity to build great American businesses,” said Mr. Bastable.
Altus Capital, in partnership with Abacus Finance, has completed a dividend recapitalization of MGC Diagnostics, a maker of non-invasive medical diagnostic systems.
“Abacus Finance delivered again,” said Greg Greenberg, the founder and senior partner at Altus, “and we are thrilled to continue our partnership.”
“We are happy to continue to support MGC Diagnostics, the company has been performing extremely well and we are excited to continue working with them as our partners,” said Tim Clifford, the president and CEO of Abacus Finance. “As in other transactions, our success was a function of our speed, cash-flow flexibility, and certainty of close – key aspects of what we call our Total Partnership Approach™.”
“We’re excited by MGC’s future prospects and thrilled to support Altus Capital once again,” concluded Aized Rabbani, a managing director with Abacus.
Nelson Global Products, a portfolio company of Wind Point Partners, has acquired Tru-Flex, a manufacturer of flexible components used in exhaust systems from HBM Holdings.
The acquisition of Tru-Flex gives Nelson Global additional thermal, fluid, and NVH (noise, vibration, and harshness) products; and adds manufacturing operations in Europe. “We are excited to welcome the entire Tru-Flex team to Nelson,” said Mr. Scgalski. “Combining Tru-Flex’s engineering strengths, engineered NVH solutions and European operations with Nelson’s global purchasing, logistics, manufacturing and distribution networks and engineering capabilities allows us to better serve our customers and accelerate growth.”
Chicago-based 
According to a recent survey by Grant Thornton, the majority of merger and acquisition professionals expect a surge in deal volume, especially in the technology, retail, hospitality and insurance industries.
“Private equity has significant levels of capital from recent fundraising,” says Elliot Findlay, the national managing principal of mergers and acquisitions at Grant Thornton. “The exhaustion from COVID-19 also has some private business owners saying, ‘We weathered the storm, but I don’t want to do that again — let’s take some money off the table.’”
“The volume of respondents expecting 90 to 100 percent of deals to have an earnout is staggering,” said Max Mitchell, Grant Thornton’s purchase agreement advisory leader. “If they’re right, then almost every deal will have an earnout by the end of the year.” Mr. Mitchell’s team actively advises buyers and sellers on the accounting and financial aspects of purchase agreements.
Joining the rise in earnouts may be a rise in earnout disputes. “Sellers have been recently challenging whether pandemic-related adjustments should be made to earnout metrics,” said Charles Blank, a managing director of forensic advisory services at Grant Thornton. “Many of the disputes happening right now relate to transactions that closed before the pandemic when we did not have provisions in place addressing business shutdowns. We’re now in uncharted territory, where businesses and their leaders are trying to reconcile what impact those shutdowns should have on earnouts.”
Clearhaven Partners, an investor in software and technology companies, has held an oversubscribed and above target closing of its debut fund, Clearhaven Fund I LP, with $312 million of capital commitments.
“We are humbled by the tremendous support from our limited partners who chose to partner with Clearhaven during a volatile macro environment and with many alternative choices,” said Ms. Noon. “We believe that our clarity of purpose – to invest exclusively in growing software and technology businesses who seek an operationally driven partnership with our team – matches not only our team’s experience and prior track record but also our limited partners’ investment preferences. Our team has come together united in Clearhaven’s mission and values, and we have never been as optimistic about the technology market opportunity as we are today.”
HarbourVest has held a final closing of HarbourVest Direct Lending Fund LP (HDL) with more than $892 million in capital commitments. The new fund was oversubscribed and closed above its original target of $600 million.
“We are pleased to mark the final close of our inaugural, dedicated direct lending fund, bringing our total capital under management for credit investments to over $3.3 billion,” said John Toomey, a managing director at HarbourVest. “The past year has demonstrated the resilience of the asset class and reinforced our objective to broaden the reach of HarbourVest’s solutions to help clients invest in rapidly growing strategies.”
“HarbourVest’s credit platform differentiates itself in the marketplace through our proprietary sourcing engine, which is driven by the breadth and depth of our primary and secondary partnerships,” said Karen Simeone, a managing director at HarbourVest. “Private credit deal flow continues to accelerate, propelled by increased private equity deal activity and by sponsors increasingly choosing the flexibility and certainty of execution that private financings offer versus the syndicated loan market.”
Kian Capital Partners has sold Driven Lighting Group (DLG) to Wheel Pros, a portfolio company of Clearlake Capital.
“DLG has shown outstanding performance since we first partnered with Matt Kossoff and the team, and we’re glad we were able to achieve an outcome the DLG team desired in terms of finding a home where they believe they can accelerate their rapid trajectory,” said Rick Cravey, a partner at Kian Capital. “This investment represents a perfect case study of what we do at Kian: provide first institutional capital to innovative entrepreneurs, and then work closely with management teams to build out systems, teams and facilities and make acquisitions through thesis-driven growth strategies. We are proud to have partnered with DLG over this period of growth and look forward to following the company in its next chapter with Wheel Pros.”
Clearlake invests in industrials and energy; software and technology-enabled services; and consumer sectors. The firm was co-founded by Jose Feliciano and Behdad Eghbali in 2006 and is headquartered in Santa Monica, California with an additional office in Dallas, Texas. In April 2020, Clearlake held a hard cap and oversubscribed final close of its sixth private equity fund, Clearlake Capital Partners VI LP, with more than $7 billion in commitments.
Charlotte and Atlanta-based 
Weinberg Capital Group (WCG) has acquired Drake Waterfowl Systems, a provider of hunting, fishing, and casual apparel used by outdoor enthusiasts.
Cleveland-based 
“We look forward to partnering with management to build on Drake’s strong legacy within the hunting and outdoor enthusiast community,” said Nick Leiby, a partner at Weinberg Capital.
