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
