Summary of investments and acquisitions in the nutrition, health & wellness, and green product industries.

• NCN News for December 6, 2010

Pacific Community Ventures Invests in Expanding Pacific Catch Restaurants
Pacific Catch (San Francisco), a casual fish-focused restaurant chain, has completed a $4 million private equity investment led by Pacific Community Ventures (PCV), a private equity firm focused on small, high-growth California businesses. PCV was the sole institutional investor. Capital will be used to add locations and support growth. Pacific Catch’s menu offers a mix of pan-Pacific cuisine including Hawaiian, Japanese, and Latin American dishes. Pacific Catch was started in 2004 by two restaurateurs who received financial support from industry investors and entrepreneurs. “The quality-focused, casual fish house category is an underserved segment of the market, and Pacific Catch fills this gap with a unique concept and high value proposition. The Company has significant growth opportunities and we look forward to its successful expansion,” said Peter Mehrberg, the lead PCV partner on the transaction.

KKR, Vestar and Centerview to Acquire Del Monte Foods in $5.3 Billion Deal
Del Monte Foods Co. (San Francisco) and an investor group led by funds affiliated with Kohlberg Kravis Roberts & Co. (KKR), Vestar Capital Partners and Centerview Partners, have agreed to acquire Del Monte for $19 per share in cash. The transaction is valued at approximately $5.3 billion, including the assumption of approximately $1.3 billion in net debt. "The hard work and dedication of our talented team has helped to transform Del Monte from a $1 billion consumer foods business into a branded pet and consumer products company with more than $3.7 billion in revenues," said Richard G. Wolford, chairman and CEO of Del Monte Foods. "This transaction will enable our Company to continue to successfully grow, building on the foundation our team has put into place.” Del Monte’s pet brands include Meow Mix, Kibbles 'n Bits, Milk-Bone, 9Lives, Gravy Train, and Nature's Recipe. Food brands include Del Monte, Contadina, S&W and College Inn.

PepsiCo to Acquire 66% of Russian Dairy and Juice Company for $3.8 Billion
PepsiCo has agreed to acquire 66% of Wimm-Bill-Dann for $3.8 billion pending government approvals. Wimm-Bill-Dann is a leader in Russia in both traditional and value added dairy products and has a solid position in juice, according to PepsiCo. Founded in 1992, it had revenues for the 12 months ended in June 2010 of around $2.4 billion. The transaction implies a total enterprise value of approximately $5.4 billion for the Russian company and will establish PepsiCo as the largest food-and-beverage business in Russia, building its presence in key markets in Eastern Europe and Central Asia. PepsiCo said the acquisition will also will raise its annual global revenues from nutritious and functional foods from approximately $10 billion to nearly $13 billion, moving the company closer to its strategic goal of building a $30 billion nutrition business by 2020. The purchase is expected give PepsiCo a high-growth platform in the dairy category. "Dairy has a huge, untapped potential to bridge snacks and beverages,” said Indra Nooyi, PepsiCo chairman and CEO. “We see the emerging opportunity to 'snackify' beverages and 'drinkify' snacks as the next frontier in food and beverage convenience." Upon completion, PepsiCo said its brands will rank first among food and beverage companies operating in Russia with approximately $5 billion in revenue, and it will have six of the 20 largest food and beverage brands in Russia. PepsiCo is an NCN Cornerstone Investor.

PepsiCo Increases Coconut Water Investment
In other PepsiCo news, the beverage giant increased its investment in the coconut water company O.N.E. (Los Angeles), thereby acquiring a majority stake. Terms were not disclosed, but it was the second round of investment in O.N.E. by PepsiCo and the private equity firm Catterton Partners (Greenwich, Conn.). "Coconut Water is one of the fastest growing categories in the U.S. beverage market and one in which we see a great deal of potential," said Massimo d'Amore, CEO of PepsiCo Beverages Americas. Supply has been a limiting factor for coconut water producers, but O.N.E. has developed partnerships with three of the world’s largest coconut processors in the Philippines and Indonesia, PepsiCo said. Other nutrition industry investments made by Catterton include Sweet Leaf Tea and Nature's Variety Pet Food; its realized investments include Baja Fresh Mexican Grill, Kettle Foods, Odwalla and Wellness Pet Food.

Umami Sustainable Seafood Acquires Baja Aqua Farms
Umami Sustainable Seafood Inc. (San Diego, Calif.) has acquired Baja Aqua Farms, a Mexican producer of bluefin tuna. In July 2010, Umami acquired 33% interest in Baja Aqua Farms along with an option to acquire an additional 66.98%. Umami exercised their option, making Baja a 99.98% owned subsidiary. Umami owns and operates Kali Tuna, a Croatian aquaculture operation raising Northern bluefin tuna in the Adriatic Sea. “In addition to doubling our annual production of Northern bluefin tuna, the completed acquisition of Baja Aqua Farms should increase our global market share of this premium food to over 20%,” stated Oli Steindorsson, Umami's Chairman

Danone Acquires Frozen Yogurt Company
YoCream International, Inc. (Portland, Ore.), a manufacturer and wholesaler of frozen yogurt and fruit-based frozen desserts and beverages, has entered into a definitive merger agreement with Danone under which a subsidiary of Danone will merge with YoCream, and each outstanding share of YoCream common stock will be converted into the right to receive approximately $39.82 per share in cash, representing an enterprise value of YoCream of approximately $103 million. Co-founder John Hanna will remain CEO and a director of YoCream, and the company's senior management team, will also remain. They, along with one former board member, will retain an ownership interest of approximately 5% in the company. "This transaction benefits our shareholders by providing them with the opportunity to receive a significant premium for their YoCream shares, and joining the Danone Group represents a natural progression in our corporate achievement to provide healthful live and active cultured frozen yogurt to consumers in the US and abroad," said Hanna. YoCream sales for the nine months ended July 31, 2010 increased 12.1% to $41,721,000; net income increased 6% to $4,778,000. Sales of the company’s core frozen yogurt business grew 50.2% in the third quarter following 52.1% and 30.9% in the second and first quarters, respectively. Danone is a Fortune 500 company and an NCN Cornerstone Investor.

Glencoe Capital Sells ACE Bakery to Weston Foods for C$110 Million
Glencoe Capital, LLC (Chicago) has sold its Toronto-based artisan bakery business, ACE Bakery Ltd., to Weston Foods (Canada) Inc. for C$110 million. Glencoe Capital acquired ACE Bakery in February 2008 and together with its management team embarked on a series of strategic initiatives, including product line extensions for its artisan breads; new product introductions such as shelf stable crisps; expanded marketing channels into foodservice and private label programs; and additional production capacity through investments in new plant and equipment. ACE opened a new 30,000-square-foot facility in Ontario in January 2010. As a result, ACE Bakery increased its revenues and cash flows by 67.5% and 41.6%, respectively, according to Glencoe Capital.

SunOpta Acquires Edner in Healthy Convenience Foods Category
SunOpta Inc.’s wholly owned subsidiary SunOpta Fruit Group Inc. has agreed to acquire 100% of the assets and business of Edner of Nevada, Inc. for $4 million in cash plus a potential earn-out. Edner was founded in 2003 by Ed and Vicky Kirschner and produces portable foods such as nutrition bars and fruit based snack bars serving the convenient healthy snacks category. It has a 104,000-square-foot facility in Carson City, Nev. Edner co-packs for branded and private label customers and has revenues of approximately $10 million, with equipment and capacity available to support approximately $50 million in revenues without significant capital investment, according to a statement. SunOpta Inc. is a vertically integrated company operating primarily in North America and focused on natural, organic and specialty foods and ingredients. It has completed more than 30 transactions since 1999, including acquisitions in soymilk, dietary supplements, fruit and vegetable products, specialty grains, organic food and distribution. For fiscal 2009 SunOpta Inc. reported revenues of $989 million. For the third quarter 2010, SunOpta Foods reported revenues of $197.5 million, up nearly 1% versus the third quarter of 2009.

Fiji Water Turns to Wine
Fiji Water (Basalt, Colo.) has acquired Justin Vineyards & Winery (Paso Robles, Calif.). Financial details were not disclosed. Justin Winery is a family owned and operated winery making estate grown and produced wines. It was founded in 1981 by Justin and Deborah Baldwin who planted 160 acres with major Bordeaux varietals. Fiji Water was acquired by the privately held company Roll International Corp. 2004. Among Roll’s other holdings are Paramount Citrus and Paramount Farms, growers and processors of citrus, almonds and pistachios; and POM Wonderful, a leading grower of pomegranates and maker of POM Wonderful pomegranate juice. This is the eighth acquisition of a California winery in 2010, according to the Wine Institute in San Francisco.

Stratum Nutrition Acquires ESM Technologies
Stratum Nutrition, a Novus International business, announced that its parent company has acquired a significant interest in ESM Technologies LLC (Carthage, Mo.), a leading supplier of eggshell calcium and eggshell membrane wellness ingredients. ESM Technologies will become a joint venture between its previous owners and Stratum's parent. ESM will be run by current management. Previously, Stratum Nutrition and ESM had been working together under a strategic Technology Partnership. “This investment allows ESM Technologies and Stratum Nutrition to accelerate growth opportunities internationally and in food and beverage applications for NEM, ESC and other ingredient technologies,” the company stated. Stratum Nutrition focuses on human nutrition through functional and specialty ingredients for manufacturers and marketers of foods, beverages and dietary supplements. Stratum is an NCN Cornerstone Investor.

Vitamin Shoppe Secondary Offering Generates $210 Million for Stockholders
Vitamin Shoppe (Bergen, N.J.) recently completed a follow-on offering of 6,303,006 shares of its common stock at $29 per share. All of the shares of common stock were sold by Vitamin Shoppe stockholders. The underwriters exercised their full overallotment option to purchase an additional 945,450 shares from Irving Place Capital, the principal stockholder of Vitamin Shoppe and a selling stockholder in this offering. The offering generated approximately $210 million of gross proceeds, all of which was received by the selling stockholders. Vitamin Shoppe is a specialty retailer and direct marketer of dietary supplements, sports nutrition and other health and wellness products. For each of the past five years, the company has been the second largest in retail sales and the fastest growing national VMS specialty retailer, according Baird, the investment bank that served as a co-manager for the offering. GNC remains the largest dietary supplement chain. Vitamin Shoppe markets over 700 brands and a selection of proprietary Vitamin Shoppe, BodyTech and MD Select brands. Vitamin Shoppe reported net sales were up 12% to $674.5 million for year ended December 26, 2009. Net sales increased 11.3% to $187.4 million for the three months ended September 25, 2010 compared to the prior year’s third quarter.