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Post spins off Active Nutrition business in IPO
Post Holdings’ (St. Louis, Missouri) newly formed subsidiary BellRing Brands Inc. has launched a roadshow for its initial public offering of approximately 24 percent of its ownership. The IPO is expected to generate up to $570 million. BellRing will compete in the “global convenient nutrition category” and is a holding company for Post’s Active Nutrition business, notably the Premier Protein, Dymatize and PowerBar brands. Net sales for the Active Nutrition business were $827.5 million in fiscal 2018, representing a CAGR of 20 percent since 2016, according to BellRing’s prospectus. Premier Protein RTD shakes generated 77% of sales in FY 2018, with Dymatize (protein powders) at 13%, and PowerBar at 7%. Post announced plans nearly a year ago to take its Active Nutrition business public to create a scalable, high growth asset with the flexibility to pursue both organic and M&A opportunities.
Hometown Food buys veteran organic brands from Hain Celestial
Hometown Food Company (Chicago, Illinois) has acquired the organic food and confectionery brands Arrowhead Mills and SunSpire from The Hain Celestial Group Inc. (Lake Success, New York) for $15 million. Hometown Food is a wholly owned portfolio company of Brynwood Partners, a specialist in providing exits for “corporate-orphan brands.” Arrowhead Mills was founded in 1960 in the Texas Panhandle by Frank Ford, a pioneer in organic farming, and competes in the baking and breakfast categories. SunSpire makes Fair Trade organic chocolate products free of refined sugars, hydrogenated oils, trans-fats, preservatives and artificial flavors. Hain Celestial described the transaction as a strategic divestiture to reduce the complexity of its brand portfolio. Hometown Food was formed by Brynwood in 2018 to acquire a portfolio of brands from The J.M. Smucker Company for $375 million.
Papa announces investment to curb health impact of loneliness
Papa (Miami, Florida), a company that provides "Grandkids on Demand," announced a $10 million Series A led by Canaan, in addition to partnerships with several large health insurance plans. Papa was founded in 2016 to connect college and nursing students, known as "Papa Pals," to older adults who need help with transportation, chores, technology, and other services. By providing companionship to seniors, Papa seeks to alleviate social isolation and loneliness, which has the same impact on health as smoking 15 cigarettes per day, according to research cited by Papa.
Firmenich strengthens natural ingredients with Robertet buy
Firmenich (Geneva, Switzerland), an international perfume and flavors giant, is acquiring a 17% stake in Robertet (Grasse, France) from First Eagle Investment Management. “With its strong naturals portfolio in Perfumery, Flavors and Ingredients, Robertet is well positioned to benefit from consumers’ continued demand for authentic natural products,” said Gilbert Ghostine, CEO of Firmenich. “This investment is fully in line with our vision for sustainable and natural solutions.” Should it be invited to do so, Firmenich may also consider taking a controlling interest in Robertet.
VMG’s new snack platform buys Popchips
Velocity Snack Brands (VSB, Los Angeles, California), a new snacking platform of VMG Partners, has made its debut by acquiring Popchips from majority owner Verlinvest and the Popchips board of directors. The acquisition platform and incubator will own the Popchips brand in North America and international markets outside of the United Kingdom and Europe. Amit Pandhi, former president and chief executive of Arctic Zero better-for-you frozen desserts, will serve as VSB’s CEO. Popchips was co-founded in 2007 by food entrepreneur Keith Belling, who recently launched RightRice.
Two veteran organic tea brands merge
Choice Organic Teas closed its Seattle headquarters after being acquired by Yogi Tea (Springfield, Oregon), according to World Tea News. Choice Organic celebrated its 30th anniversary this year; it was the first exclusively organic tea line and one of the first fair trade certified, Non-GMO Project Verified tea purveyors in the United States. Yogi was founded in 1984 by Yogi Bhajan and is a top-selling tea in the U.S. natural food channel, producing mostly herbal and green teas and chai. Choice joins Yogi Products as a subsidiary of East West Tea Company.
Stevia producer gets strategic investment for expansion
SweeGen Inc. (Rancho Santa Margarita, California), a stevia-based sweetener company, has received an additional strategic investment led by Sumitomo Chemical of Japan and Outlook Investment Group. The investment will support SweeGen’s expansion of an additional manufacturing site in Europe with a capacity to produce 3,000 metric tons of non-GMO stevia sweeteners. The global sweetener market is valued at approximately $100 billion, according to Sweegen, which said non-GMO stevia sweeteners have led the way in replacing sugar in foods and beverages, nutritional products and pharmaceuticals.
Specialized foodservice distributors join forces
Highview Capital LLC has acquired Gold Star Foods Inc. (Ontario, California), a specialized food distributor to K-12 child nutrition programs. As part of the agreement, Gold Star will merge with existing Highview portfolio company Good Source Solutions Inc. (Carlsbad, California), a food distributor serving the education, corrections, food service, healthcare and other markets. Highview Capital acquired Gold Star from Castle Harlan Inc. Gold Star and Good Source will continue to operate as independent brands, and the combined company will serve more than 8,000 customers nationwide.
Modern Acupuncture closes minority investment from Strand Equity
Modern Acupuncture (Scottsdale, Arizona), an acupuncture franchise with the motto “Let’s Tingle” announced a minority investment from Strand Equity. Modern Acupuncture operates 49 locations in 16 states and plans 11 additional locations by the end of 2019. Founded in 2016 by executives from The Joint Chiropractic franchise, the company offers affordable memberships encouraging patients to include acupuncture in their health and beauty routines. The company says it plans to double in size in 2020. Strand Equity’s other investments include Vita Coco, Chopt, Oatly, Youth To The People and Real Good Foods.
Sweetgreen raises $150 million to invest in strategic technology
Fresh-casual restaurant chain Sweetgreen (Los Angeles, California) announced closing a $150 million financing round last month, co-led by Lone Pine Capital and D1 Capital Partners and valuing the company at $1.6 billion. With over half of Sweetgreen orders taking place through digital channels, capital will be used for strategic investments in technology, data, supply chain, and social impact. Sweetgreen will test and deploy emerging technologies and new models, including Outpost for free office delivery. Sweetgreen has 97 restaurants and more than 4,000 team members.
Vestar invests in Simple Mills gluten-free bakery products
Vestar Capital Partners (New York, New York) is making a minority investment in Simple Mills (Chicago, Illinois), a clean-label baking mix and cracker brand and number-three cookie brand in the natural channel. Vestar will help Simple Mills advance new product development, brand-building and distribution expansion. Terms were not disclosed. Founded in 2012, Simple Mills offers more than 30 baking mixes, crackers, cookies, bars and frostings that are free of gluten, grain, dairy, soy, GMOs, excessive sugar and artificial ingredients.
Canopy Growth acquires BioSteel Sports Nutrition
Cannabis company Canopy Growth (Smith Falls, Ontario, Canada) has purchased a majority stake in BioSteel Sports Nutrition Inc. (Toronto, Ontario, Canada). The cash transaction provides Canopy with a platform in the sports nutrition and hydration categories and lays the groundwork for cannabidiol-enhanced sports nutrition products. Founded in 2009, BioSteel has built a reputation among high performance athletes and says its products have been purchased by over 70 percent of the teams in North America’s four major sports leagues. "The use and acceptance of CBD-based products in the professional sports landscape has changed. We have witnessed the negative effects of prescription painkillers and athletes are looking for healthier alternatives," said Michael Cammalleri, co-founder and co-CEO of BioSteel Sports Nutrition.
World High Life to buy Love Hemp in UK
Medicinal cannabis investment company World High Life announced an $11.23 million deal to buy British cannabis oil brand Love Hemp (London, UK), according to Reuters. Love Hemp distribution includes CBD-infused water in Sainsbury’s supermarkets and CBD oil in Holland and Barrett. The deal is expected to help World High Life expand in the United Kingdom and Europe.
TorQuest invests in healthy beverage manufacturing
TorQuest Partners (Toronto, Ontario, Canada) has invested in Joriki Inc. (Scarborough, Ontario), a Canadian contract manufacturer of beverages for major brand and private label customers primarily in the juice, ready-to-drink tea, sports drink, enhanced water and dairy alternative categories. This will be the ninth platform investment for TorQuest. Terms of the transaction were not disclosed.
Simply Good Foods announces offering of common stock
The Simply Good Foods Company (Denver, Colorado), a marketer of nutritional foods and snacks, has announced an offering of common stock. Net proceeds will be used to pay for a portion of its $1 billion acquisition of Quest Nutrition LLC announced in August. Simply Good Foods makes nutrition bars, RTD shakes, snacks and confectionery under the Atkins, SimplyProtein and Atkins Endulge brands.
Waterloo sparkling water closes $5 million credit line
Sparkling water brand Waterloo (Austin, Texas) recently closed a $5 million revolving line of credit with Dwight Funding to be used for working capital and growth initiatives. Waterloo anticipates closing the year 200% up over last year and says it is differentiating its brand by delivering a richer, more authentic taste than other sparkling waters. Waterloo is also made with Non-GMO Project verified and Whole 30 Approved flavors, free of calories, sodium, sugar and artificial sweeteners.
Ferment Consortium to fund Ginkgo Bioworks’ spinouts
Ginkgo Bioworks (Boston, Massachusetts) has unveiled the Ferment Consortium, an investment vehicle for funding its spinout companies. The fund is supported by a $350 million commitment from Ginkgo's current major investors, including Viking Global Investors, General Atlantic and Cascade Investment. Ginkgo has already spun out two companies in the agriculture and food industries: Joyn Bio microbes for soil health was launched in partnership with Bayer Crop Sciences with $100 million in financing; and ingredients innovator Motif FoodWorks with $90 million and strategic support from Fonterra and Louis Dreyfus Company.
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