Yellow Wood Hits Hard Cap

Yellow Wood Hits Hard Cap

Yellow Wood's third fund was oversubscribed and included commitments from many of the firm's long-time limited partners

Yellow Wood Partners, an investor in consumer brands and companies, has closed Yellow Wood Capital Partners III LP at its hard cap with $750 million of limited partner capital commitments.

Fund III was oversubscribed and included commitments from many of Yellow Wood’s long-time limited partners as well as new investors including university endowments, family offices, financial institutions and family offices. Yellow Wood’s earlier fund, Yellow Wood Capital Partners II LP, closed in July 2017 with an oversubscribed $370 million of committed capital.

“We had very strong demand from investors in our previous funds who continue to support us with higher commitments, and we are very pleased to complete Fund III with the addition of a small and select group of highly sophisticated new investors to the Yellow Wood family,” said Dana Schmaltz, a partner at Yellow Wood. “Our investment focus remains the same as it has been for more than a decade as we seek to find and work with brands to help them grow. As we have done and continue to do with our existing portfolio of brands, this successful fundraise allows us to continue our pursuit of building a limited number of platforms where we can apply our intense operating focus in close collaboration with entrepreneurs and management teams to create value for our shareholders.”

Yellow Wood invests in consumer brands and companies that operate in the mass, drug, food, specialty, value, club and e-commerce channels and have EBITDA from $10 million and $50 million.

“We invest in a dynamic consumer goods sector that continues to experience dramatic growth, even during the current challenging environment as the global pandemic has impacted consumer consumption of most brands,” said Tad Yanagi, a partner at Yellow Wood. “Our Yellow Wood team is well positioned to continue to identify high-growth companies as well as complex corporate carve outs where we can partner with management teams to build market leading brands into true global businesses.”

Yellow Wood’s portfolio of consumer brands includes footcare brands Dr. Scholl’s and Scholl. In November 2019, Yellow Wood formed Scholl’s Wellness Company to acquire Dr. Scholl’s from Bayer for $585 million. In February 2021, Yellow Wood acquired the Scholl footcare brand (Scholl), which operates globally outside of the Americas, from consumer-goods company Reckitt Benckiser. The buy of Scholl reunited the business with the Dr. Scholl’s brand after 37 years of separate ownership. The company’s brands now have combined annual retail sales of more than $700 million.

Other portfolio companies include Real Techniques and EcoTools (both acquired in September 2018), self-tanning brands Isle of Paradise, Tanologist and Tan-Luxe (all three acquired in May 2020), and skincare brand Freeman Beauty (acquired in August 2017).

PJT Partners (Park Hill) was the placement agent on Fund III with Proskauer Rose providing legal services.

© 2022 Private Equity Professional | April 5, 2022

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