pet food

Smucker to Sell Pet Food Brand to Nexus

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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

Graham Sells Pet Food Platform

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Graham Partners has sold BrightPet Nutrition Group, a maker of premium and super-premium pet food and treats.

BrightPet specializes in branded and private label pet foods and also provides co-packing services. The company is headquartered 60 miles southeast of Akron in Lisbon, Ohio.

Graham created the BrightPet platform in April 2016 through the acquisition of two contract manufacturing businesses – Ohio Pet Foods and Southern Tier Pet Nutrition – and the brands of Blackwood Pet Food including Blackwood, Adirondack, and Makin’ Trax. In June 2017, the company acquired premium pet food brand, By Nature, and in April 2018 it acquired Phoebe Products including its SO Bright brand of pet food.

BrightPet’s products are sold both domestically and internationally and the company is one of only a few USDA Certified Organic pet food producers in the US.

During its ownership term, Graham led the acquisition of two add-ons, added new products, expanded BrightPet’s management team, formed an advisory council, and streamlined the operations of the business. As a result, BrightPet’s EBITDA grew by 85% during Graham’s hold period, including throughout the COVID-19 pandemic.

“Our partnership with Graham has been very rewarding and we are thankful for their support,” said Matt Golladay, CEO of BrightPet. “In particular, Graham’s network of experienced industry professionals, coupled with the firm’s operational rigor, helped position BrightPet for long-term success.”

“We saw a strong core business with numerous avenues for growth fueled by the humanization of pets and had conviction that BrightPet was a great business given its expertise in formulations, key certifications, and relentless focus on quality,” said Joe Heinmiller, a managing principal at Graham Partners. “We are proud to have helped build a leading pet food and treat producer and we wish BrightPet continued success under new ownership.”

Philadelphia-based Graham Partners acquires companies with EBITDA between $5 million and $50 million and will invest in smaller companies as add-on acquisitions to existing portfolio companies. The firm is sponsored by the Graham Group, an industrial and investment concern with interests in plastics, packaging, machinery, building products, and outsourced manufacturing.

Private Equity Professional | September 30, 2020

Whitney Closes C.J. Foods Add-On

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C.J. Foods, a maker of specialty dry pet food for US super-premium brands, has closed its acquisition of pet food maker American Nutrition. C.J. Foods has been a portfolio company of J. H. Whitney Capital Partners since June 2014.

American Nutrition (ANI) is one of the nation’s largest manufacturers of super-premium quality dry, canned and baked pet food and treat products. The company operates five manufacturing facilities in Washington, Utah and Pennsylvania with over 400 employees serving numerous national brands as well as international brands in 17 countries worldwide. Ogden, Utah-based ANI was founded in 1972 by Jack Behnken and is a second-generation family-owned company.

C.J. Foods is a custom manufacturer of dry pet foods for dogs, cats, and other household pets for more than 40 of the top US super-premium and ultra-premium brands. The company offers services that include product consulting and development, materials management, customized production and packaging, quality control, and managed inventory.

C.J. Foods employs more than 400 people at its six processing plants — two in Pawnee City, Nebraska; two in Bern, Kansas; one in Baxter Springs, Kansas; and one in Brownwood, Texas — with a combined total of 620,000 sq. ft. of plant space from which the company produces nearly half a billion pounds per year of extruded pet foods and treats. C.J. Foods was founded in 1985 by the husband and wife team of Chuck and Joyce Kuenzi and is headquartered in Bern, Kansas.

The combination of C.J. Foods and ANI creates the largest independent manufacturer of super premium pet food in the country, producing over one billion pounds of pet food annually. “Completing this transaction in a time of uncertainty speaks to the strength of the industry as well as these two world-class manufacturers,” said David McLain, CEO, C.J. Foods. “The combined organization will deliver an unparalleled national footprint and broad product portfolio with a focus on delivering products of the future through innovation and category leadership.”

The buy of ANI is the second add-on for C.J. Foods under J. H. Whitney ownership and follows the April 2018 buy of Lortscher Animal Nutrition, a multi-facility and Bern, Kansas-based custom miller and ingredient supplier to the pet food industry.

J.H. Whitney invests from $25 million to $200 million in companies that have from $50 million to $500 million in revenue. Sectors of interest include consumer, healthcare, and specialty manufacturing. The firm was founded in 1946 and is based in New Canaan, Connecticut.

© 2020 Private Equity Professional | March 20, 2020

Whitney Inks Second Add-On for C.J. Foods

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C.J. Foods, a maker of specialty dry pet food for US super-premium brands, has agreed to acquire pet food maker American Nutrition. C.J. Foods has been a portfolio company of J. H. Whitney Capital Partners since June 2014. The firm acquired the business from Trinity Hunt Partners.

American Nutrition (ANI) is one of the nation’s largest manufacturers of super-premium quality dry, canned and baked pet food and treat products. The company operates five manufacturing facilities in Washington, Utah and Pennsylvania with over 400 employees serving numerous national brands as well as international brands in 17 countries worldwide. Ogden, Utah-based ANI was founded in 1972 by Jack Behnken and is a second-generation family-owned company.

C.J. Foods is a custom manufacturer of dry pet foods for dogs, cats, and other household pets for more than 40 of the top US super-premium and ultra-premium brands. The company offers services that include product consulting and development, materials management, customized production and packaging, quality control, and managed inventory.

C.J. Foods employs nearly 500 at its six processing plants — two in Pawnee City, Nebraska; two in Bern, Kansas; one in Baxter Springs, Kansas; and one in Brownwood, Texas — with a combined total of 620,000 sq. ft. of plant space from which the company produces nearly half a billion pounds per year of extruded pet foods and treats. C.J. Foods was founded in 1985 by the husband and wife team of Chuck and Joyce Kuenzi and is headquartered in Bern, Kansas.

Post-closing – the transaction is expected to close in April 2020 – David McLain, the CEO of C.J. Foods, will join the combined C.J. Foods/ANI board of directors; and Bill Behnken, current president and CEO of ANI, will serve as a board member. Tod Morgan will continue as the chairman of the board of C.J. Foods. C. J. Foods is presently evaluating how the two companies will be integrated, including the name of the merged entity.

According to C.J. Foods, the buy of ANI creates the largest independent manufacturer of super premium pet food in the country, producing a total of one billion pounds of pet food annually, and gives the company a full portfolio of pet food and treats with national and international distribution. “This acquisition creates the leading manufacturer of super premium pet food with a national footprint, focused on producing and delivering the highest quality products to our customers,” said Mr. Morgan.

The buy of ANI is the second add-on for C.J. Foods under J. H. Whitney ownership and follows the April 2018 buy of Lortscher Animal Nutrition (LANI), a multi-facility and Bern, Kansas-based custom miller and ingredient supplier to the pet food industry.

J.H. Whitney invests from $25 million to $200 million in companies that have from $50 million to $500 million in revenue. Sectors of interest include consumer, healthcare, specialty manufacturing, and business services. The firm was founded in 1946 and is based in New Canaan, Connecticut.

© 2020 Private Equity Professional | February 19, 2020

Arbor Adds to Red Collar Pet Foods

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Red Collar Pet Foods, a portfolio company of Arbor Investments, has acquired Hampshire Pet Products.

Hampshire Pet Products is a provider of baked and cold formed pet products and is also a co-manufacturer of several of the nation’s leading branded pet treats. The company, led by CEO Julie Larson, has a 200,000 sq. ft. facility with three production lines and six packaging lines in Joplin, MO (www.hampshirepetproducts.com).

Arbor Investments formed Red Collar Pet Foods in December 2018 to acquire the US-based private label pet food products business of Mars Petcare. Red Collar manufactures private label pet food and treat products for national retail customers and includes five manufacturing facilities in South Carolina, Ohio, Oklahoma (2) and California. The company is headquartered in Franklin, TN (www.redcollarpet.com).

The buy of Hampshire Pet expands Red Collar’s capabilities in the premium and super premium baked and cold formed treats category. Additionally, the added production capabilities will make Red Collar one of the largest private label and contract manufacturers of dog and cat treats in North America.

“We’re thrilled to welcome Hampshire Pet and its talented group of associates to the Red Collar family,” said Chris Hamilton, CEO of Red Collar. “The pet snack and treat market continues to grow at unprecedented rates and the Hampshire facility is one of the largest in the industry. Their commitment to food safety, quality and cutting-edge innovation make it a nimble, one-stop manufacturing solution for brands and retailer partners alike.”

“We are excited to add Hampshire Pet’s well-regarded pet treat franchise to Red Collar’s treat business,” said Arbor Partner Chris Harned. “With Red Collar having a facility in nearby Miami, OK, the two treat businesses have complementary manufacturing capabilities, similar agile innovation-driven cultures and great track records of exceeding customer expectations. We look forward to continued growth and development of our two-plant pet treat ‘center of excellence’ together with veteran leader Julie Larson, who will report to Chris Hamilton, President and CEO of Red Collar.”

Arbor invests in the food, beverage and related industries. Typical targets will have annual revenues of up to $300 million and EBITDA from $5 million to $50 million. Since founding in 1999 the firm has acquired or invested in over 55 food and beverage companies in North America. In July 2016, Arbor closed its fourth equity fund, Arbor Investments IV LP, with $765 million of capital and its first subordinated debt fund, Arbor Debt Opportunities Fund I LP, with $125 million of capital. Arbor is based in Chicago (www.arborpic.com).

Duff & Phelps Securities was the exclusive sell-side financial advisor to Hampshire Pet on this transaction.

© 2019 Private Equity Professional | February 22, 2019

Outward Hound Completes Add-On

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Outward Hound, a portfolio company of J.W. Childs Associates, has acquired Wholesome Pride, a maker of natural ingredient pet treats. This is the first add-on acquisition for Outward Hound since J.W. Childs acquired the company from The Riverside Company in December 2017.

Wholesome Pride’s products are made from sweet potatoes, pumpkins, bananas, blueberries, peanut butter, and honey and include chews, mini-bites, strips, fries, and biscuits. Wholesome Pride is based in Chesterfield, MO (www.wholesomepride.com).

Outward Hound is a designer, manufacturer and distributor of toys, games, gear and feeders for dogs and cats. The company’s products are sold under the Outward Hound, Petstages, Dublin Dog, Bionic and Nina Ottosson brands. Outward Hound is headquartered near Denver in Centennial, CO (www.outwardhound.com).

“We’re excited to add the Wholesome Pride line of products to the Outward Hound portfolio,” said David Fiorentino, a Partner at J.W. Childs. “This strategically complementary combination creates exciting opportunities and a new platform for growth.”

Wholesome Pride was founded in 2013 by a then 17-year-old Chase Peterson who now becomes a Vice President at Wholesome Pride and will manage Outward Hound’s newly formed treat division. “I’m excited to work with the Outward Hound team and take Wholesome Pride to a whole new level of innovation, excellence and industry recognition which will allow us to pave the way for the future of the pet treat category,” said Mr. Peterson.

J.W. Childs invests in middle market companies based in North America. Sectors of interest include consumer products, specialty retail and healthcare. The firm was founded in 1995 and is based in the Boston suburb of Waltham, MA (www.jwchilds.com).

© 2018 Private Equity Professional | July 26, 2018