food ingrediants

Highlander Exits SensoryEffects

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Highlander Partners has sold its portfolio company, SensoryEffects, to Balchem Corporation, a publicly-traded human and animal health and wellness company, for $567 million.  According to Highlander Partners, the investment in SensoryEffects is the most successful one in the firm’s history.

SensoryEffects is a supplier of customized food and beverage ingredients and products. The company operates through three divisions: (1) SensoryEffects Powder Systems with locations in Ohio, Pennsylvania, Wisconsin and Minnesota; (2) SensoryEffects Flavor Systems located in Bridgeton, MO, and (3) SensoryEffects Cereal Systems located in Lincoln, NE. SensoryEffects is headquartered in St. Louis (www.sensoryeffects.com).

The sale of SensoryEffects to Balchem represents the culmination of eight years of collaboration and enterprise building between Highlander Partners and SensoryEffects’ founder, Chairman and CEO, Charles Nicolais, and the management team he assembled.

In 2005, Highlander decided to partner with SensoryEffects to consolidate and professionalize certain segments of the food ingredient manufacturing industry.  SensoryEffects first acquisition in the spring of 2006 was Diehl, a 125 year old family-owned business located in Defiance, OH, with revenues of approximately $15 million.  After eight years and twelve additional acquisitions, substantial organic growth, millions of dollars of capital expenditures and investment in human resources, SensoryEffects now has six manufacturing sites that in 2014 are expected to generate revenues of $260 million and EBITDA $53 million.

During the term of ownership, the relationship between SensoryEffects and Highlander Partners was highly collaborative.  While the day-to-day running of the business was always in the hands of management, there was constant interaction and communication between senior management and Highlander team members, particularly in the areas of acquisition strategy, tactics and negotiations; new product development projects; management recruiting; budgeting; development of key performance indicators; and overall business philosophy.

Highlander Partners makes investments in middle market businesses in targeted industries in which the principals of the firm have significant operating and investing experience. Sectors of interest include healthcare, basic manufacturing, food, and building materials. The firm has over $600 million in capital under management and is based in Dallas (www.highlander-partners.com).

Balchem Corporation (NASDAQ: BCPC) develops, manufactures, and sells specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally. The company operates in three segments: Specialty Products; Food, Pharma & Nutrition; and Animal Nutrition & Health. Balchem is headquartered outside of New York City in New Hampton, NY (www.balchem.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-8-14

Mill City Capital Acquires JMH International

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Mill City Capital has completed the acquisition of JMH International, a developer and manufacturer of soup bases and other food related products.

Co-investing with Mill City in the transaction were Northstar Capital (www.northstarcapital.com) and Babson Capital (www.BabsonCapital.com) as well as JMH’s former CEO, Kirk Mellecker.  Senior financing was provided by Fifth Third Bank.

JMH International develops and manufactures a range of soup bases, sweet and savory flavor bases, stock concentrates, sauces, gravy mixes, dessert preparations, seasoning blends, powdered drink mixes, and dry complete meals.  The company provides custom formulations to its customers in the foodservice, ingredient, specialty retail, and co-manufacturing channels.  JMH International is based in Salt Lake City (www.jmhpremium.com).

“JMH is a market leader in providing a broad range of flavor systems and custom, culinary driven solutions to the food industry” said Darren Acheson, a Managing Director at Mill City Capital. “JMH has an outstanding management team and is a strong business with significant growth potential.  This acquisition represents the fifth platform investment in our current fund and the second in the food industry.  We look forward to growing JMH together with our investment partners and the management team.”

JMH’s existing management team will continue under Mill City Capital’s ownership.  “My management team and I are very pleased that Mill City Capital, Northstar and Babson invested in JMH,” said Kevin Kowalski, JMH’s President. “This investor group has a reputation for being a value added partner in the food industry and we view this next chapter in JMH’s history as an exciting opportunity for our company and employees.”

Mill City makes control investments in industrial and consumer businesses which have EBITDAs of $7.5 million to $25 million and are located in the five Upper Midwestern states of Minnesota, Wisconsin, Iowa, North Dakota, and South Dakota. The firm is based in Minneapolis (millcitycapital.com).

“JMH is a terrific company with a bright future” said Kirk Mellecker, who purchased the company in 1997.  “I’m thrilled to have the opportunity to stay involved and assist in the future growth of JMH.”

William Blair & Company served as JMH’s exclusive financial advisor.

© 2012 PEPD • Private Equity’s Leading News Magazine • 12-13-12

Trilantic Capital Partners Exits Fortitech

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Royal DSM has entered into an agreement to acquire Fortitech, a developer of nutrient premixes and a portfolio company of Trilantic Capital Partners, in an all cash transaction for a total enterprise value of $634 million.

Fortitech is a developer and manufacturer of custom nutrient premixes for the food and beverage industries. The company fortifies (adds nutrients to improve the healthiness of) various products, including infant food/formulas, cereals, sports drinks, nutrition bars, supplements, diet products, yogurt, peanut butter, baked goods, dairy products and medical foods. The company is headquartered in Schenectady, NY, and has manufacturing and distribution facilities in Europe, Asia, South America and the United States (www.fortitech.com).

Trilantic Capital Partners first invested in Fortitech in October 2010.  During its ownership, Fortitech invested significantly in its global footprint and now has six production sites located in New York, California, Campinas (Brazil), Kuala Lumpur (Malaysia), Gastrup (Denmark) and Poznan (Poland), with additional sales offices in China, Russia and Mexico.

“Working with Fortitech’s talented founders and management team to take the company to the next level has been a gratifying experience, and we are thrilled with Fortitech’s impressive accomplishments during our partnership,” said Charlie Moore, Partner at Trilantic Capital Partners. “Our investment in Fortitech is another example of a productive partnership with a closely-held, founder-owned business. We thank the entire Fortitech team and wish them every success as they continue to build their business as part of DSM.”

Trilantic Capital Partners makes control and significant minority investments in North America and European companies.  Sectors of interests include consumer, energy, financial and business services. Trilantic was formed in 2009 by the former principals of Lehman Brothers Merchant Banking.  Trilantic currently manages two institutional private equity funds with an aggregate capital commitment of $3.9 billion. The firm is based in New York (www.trilanticpartners.com).

“Together with the Trilantic team, we have been able to make significant strides in our growth plans,” said Walt Borisenok, Fortitech Founder and CEO. “The combination of Fortitech and DSM boasts a brighter and stronger scientific research database and unsurpassed technical excellence that will enable us to bring superior value to our products and services.”

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-9-12