Smucker to Sell Pet Food Brand to Nexus

Smucker to Sell Pet Food Brand to Nexus

Nexus Capital Management has agreed to acquire the Natural Balance pet food business of The J.M. Smucker Co. for $50 million in cash.

Natural Balance is a premium pet food brand specializing in dog and cat food products manufactured with high-quality meats, carbohydrates, fats, fruits and vegetables. The company’s products are sold through specialty retailers and e-commerce channels.

In the fiscal year ending in April 2020, the business had net sales of $220 million. Natural Balance is headquartered near Los Angeles in Burbank, California.

The Natural Balance dog food brand was founded by actor, comedian, businessman, and animal welfare advocate Dick Van Patten in 1989. The business was acquired by Big Heart Pet Brands (then Del Monte Pet Foods) in May 2013 and acquired by J.M. Smucker in March 2015.

“We are extremely excited by the opportunity to acquire the Natural Balance business,” said Damian Giangiacomo, a partner at Nexus. “We believe in the brand’s strong legacy and the ability to reinvigorate the business as an independent company in partnership with the strong management team we have assembled.”

Once this transaction closes – expected by the end of January 2021 – Brian Connolly will be named as the new CEO of Natural Balance. Mr. Connolly is the co-founder of pet food maker Castor & Pollux and a former board member of  Merrick Pet Care. In 2012, Merrick, then a portfolio company of Swander Pace Capital, acquired Castor & Pollux. Swander Pace exited Merrick in 2015 through a sale of the company to Nestlé Purina.

“We are pleased to announce that Brian will lead the new Natural Balance business as CEO,” added Mr. Giangiacomo. “Brian played a critical role on our deal team throughout due diligence and crafting the go-forward strategic and operating plan for the business. Brian’s successful 20 years of experience in pet food as the co-founder of Castor & Pollux and former board member at Merrick Pet Care ideally position the Natural Balance brand for continued relevance with pet specialty retailers and pet owners.”

Nexus makes investments of $20 million to $150 million in opportunistic credit, structured investments, and private equity across a range of industries including industrials, consumer & retail, food & beverage, services, education, and distribution & logistics. The firm was co-founded in 2013 by ex-Apollo Global professionals Damian Giangiacomo and Michael Cohen and is headquartered in Los Angeles.

“The sale of Natural Balance reflects our strategy to direct investments and resources toward areas of the business that will generate the greatest growth and profitability,” said CEO Mark Smucker. “Today’s announcement helps the company further focus on the core brands within our pet food and pet snacks portfolio including Milk-Bone and Meow Mix among others, which together create a unique portfolio with significant long-term growth potential that meets consumer needs across value, mainstream and premium offerings.”

The J. M. Smucker Company (NYSE: SJM) is a manufacturer of fruit spreads, ice cream toppings, beverages, shortening, peanut butter, and other products. The company was founded in 1897 and is headquartered near Akron in Orrville, Ohio.

© 2020 Private Equity Professional | December 8, 2020

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