pet food

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

Main Post Partners has made an investment in Nulo Pet Food, a fast growing premium pet food brand.

Nulo’s products are high in meat protein, grain-free, and have low glycemic carbohydrates and contain a patented probiotic for immune and digestive health. Typical ingredients include chicken, lamb, salmon, apples, carrots, lentils, and sweet potato. Nulo Pet Food is headquartered in Austin, TX (www.nulo.com).

Nulo has been recognized as a “Top 25 Most Innovative Retail Brand” by Forbes Magazine, ranked #105 on Entrepreneur’s “Best Entrepreneurial Companies in America”, landed at #520 on the Inc. 5000 “Growth Leaders of 2017” and was one of the 100 Buzziest U.S. CPG Food & Beverage Brands.

The capital from Main Post’s investment will be used by Nulo to support marketing, new product development, and retailer merchandising and support. “Nine years ago we identified an alarming trend in rising pet obesity caused by poor nutrition and unhealthy lifestyles. Nulo is today addressing these issues with our full suite of dog and cat food and treats, providing superior nutrition so pets can live healthier, longer lives,” said Nulo Founder and CEO Michael Landa. “We’re excited to partner with Main Post Partners who shares in our strategic vision of making pets’ and their parents’ lives better. Main Post’s investment allows us to drive further brand awareness, scale our new product innovation, and add additional resources to support our valued customers and retailers.”

“We have known Michael and have been following Nulo’s success closely for years,” said Josh McDowell, Partner at Main Post. “Nulo is among the fastest growing, most respected brands in the industry and this investment is an excellent opportunity to enter the rapidly growing pet sector where parents are passionate about their pets’ health and well-being. We look forward to partnering with Michael and the Nulo team to support the brand’s continued growth.”

Main Post makes both control and non-control investments in middle market growth companies in the consumer, business services and industrial growth sectors. The firm was founded in April 2014 by managing partners Sean Honey and Jeffrey Mills, both former partners at Weston Presidio. In March 2016, the firm held a final above target closing of its inaugural fund, Main Post Growth Capital LP, with a total of $400 million in limited partner commitments, well in excess of its initial target of $250 million. Main Post is headquartered in San Francisco (www.mainpostpartners.com).

© 2018 Private Equity Professional | June 7, 2018

Bregal Partners has acquired TDBBS, a provider of natural pet chews and other treats sold under the Best Bully Sticks, Barkworthies, and Paw Luxury brand names.

TDBBS products include bully sticks, antlers, jerkies, and yak cheese chews. The company sells its products online (both direct-to-consumer and through third-party platforms), through pet specialty retailers, and through select mass/club retailers. TDBBS – which stands for Top Dog Best Bully Sticks – was founded in 2007 and is headquartered in Richmond, VA (www.tdbbsllc.com) (www.bestbullysticks.com).In recent years, growth in the US market for pet treats has outpaced the more mature pet food and supplies markets. Within pet treats, the natural and “occupational” chews category has been a key contributor to this growth as pet owners continue to view their dogs as members of the family and are seeking out high-quality products to keep their dogs busy, happy, and healthy.

Items such as bully sticks, antlers, and other natural chews – many of which are single ingredient, high in protein, highly digestible, and offer dental benefits – provide pet owners with alternatives to rawhide, synthetic treats, and more traditional baked items that may contain artificial preservatives or long lists of ingredients with uncertain benefits.

“We see a clear path for TDBBS to leverage its portfolio of high-quality products to take advantage of tailwinds surrounding the growing natural treats and chews category,” said Charles Yoon, a Managing Partner at Bregal. “As consumers increasingly demand higher quality, limited ingredient products for their pets, there is a notable opportunity to build greater awareness of the benefits of natural chews and drive new product innovation. We intend to continue investing behind our impressive team and infrastructure as we transform the natural chews category.”

Mr. Yoon has indicated that Bregal has targeted the pet industry as an area of focus over the past two years, given positive industry trends and the team’s prior investment experience in the space. The firm was previously an investor in Merrick Pet Care, a vertically-integrated manufacturer and marketer of super premium pet food and treats, which was sold to Swander Pace in December 2010. Nestlé Purina PetCare acquired Merrick in July 2015.

Bregal’s investment in TDBBS was made in partnership with Avrum Elmakis, the company’s founder, and other members of the senior management team, who remain significant shareholders in the business. In addition, with the closing of this transaction, Bregal has named Tim Hassett as the company’s new chief executive officer.

Mr. Hassett joins the company from Beam Suntory, one of the largest producers of distilled beverages worldwide, where he was President – Americas. He previously spent 10 years at Campbell Soup as Chief Customer Officer for its North America business, and also served at Kellogg’s and Procter & Gamble. “I am very excited for the opportunity to drive value creation at an organization as dynamic as TDBBS,” said Mr. Hassett. “The company has enormous potential, and I look forward to working closely with Bregal Partners and the management team in further growing the business.”

“We are thrilled Tim has joined the TDBBS team and are confident he is the right leader for the business. He is a world-class consumer-focused executive who has proven his ability to execute his vision and strategy while continuously inspiring those around him,” said Mr. Yoon.

Bregal Partners invests from $25 million to $90 million of equity in companies operating in the branded consumer products, health and wellness, food and beverage, specialty retail, energy services, and healthcare sectors. Target investments typically have from $15 million to $75 million of EBITDA. The firm has $600 million of committed capital funded by a sixth-generation family foundation. Bregal Partners is based in New York (www.bregalpartners.com).

BMO Sponsor Finance provided debt financing for this transaction and Harris Williams & Co. was the financial advisor to TDBBS.

© 2018 Private Equity Professional | January 24, 2018

Azalea Capital has made an investment in Jones Natural Chews (JNC), a maker of all-natural dog treats and chews. The company’s products are 100% natural and 100% manufactured in the US, a distinction – according to the company – held exclusively by JNC.

Jones Natural Chews sells its products through pet, farm, hardware, and other retail stores nationally. Customers include, among others, Tractor Supply, Blain’s Farm and Fleet, and PetSmart. All manufacturing and packaging is completed in-house at the company’s facilities in Rockford, IL (www.jonesnaturalchews.net – Editor’s note, watch your volume).

JNC was founded in 1970 by Robert Jones but the family’s participation in the meat industry dates back to Stephen Jones, who was a meat cutter in Rome, NY (near Syracuse) in 1859. The existing management team of JNC will continue on with the company and Laura Jones, who has been with JNC since 1998, most recently as its finance officer, has been named the company’s new president.

Co-investing in the transaction with Azalea Capital was consumer products executive Michelle Higdon. Ms. Higdon has 17 years of experience in the management of branded consumer packaged goods. From 2013 to 2015 she was the CEO of Solid Gold Pet, a portfolio company of VMG Partners. Previously, Ms. Higdon was president and COO of Waggin’ Train – a maker of dog treats – which was acquired by Nestle Purina in 2010.

Azalea Capital invests in middle market companies that have minimum annual revenues of $10 million and EBITDAs of $2 million to $10 million.  Industries of interest include manufacturing, business services, and value-added distribution with a special interest in aerospace, consumer packaged goods, healthcare and energy and industrial services.  Azalea Capital was founded in 1996 and is headquartered in Greenville, SC (www.azaleacapital.com).

Azalea Capital made its investment in JNC through its fourth fund, Azalea Fund IV, LP.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-25-16