Brynwood Partners, which is expected to begin fundraising for its latest PE fund next year, has agreed to buy a controlling stake in the Back to Nature brand food business.
Financial terms weren’t announced. Kraft Foods, the seller, is retaining a minority stake, says Ian MacTaggart, a Brynwood managing partner. Brynwood will have a more than 50% stake in the company, he says.
The transaction is expected to close in October.
Under a joint venture with Kraft, Back to Nature will offer crackers, cookies, trail mixes/nuts and granola. Management of Back to Nature’s macaroni and cheese business will remain at Kraft, a statement says. Vincent Fantegrossi, the former President and CEO of Richelieu Foods, was also named Back to Nature’s president and CEO.
Kraft acquired Back to Nature in 2003 from Organic Milling. Back to Nature, in 2002, produced revenue of nearly $10 million. MacTaggart declined to disclose current sales for the company.
The deal was not an auction. Neither Brynwood nor Kraft used investment bankers, MacTaggart says.
Greenwich, Conn-based Brynwood Partners is a lower middle market PE firm. Brynwood focuses on consumer products, light manufacturing with low capital intensity and business services. The PE shop typically invests from $40 million to $60 million equity per deal.
The Back to Nature investment comes from Brynwood’s sixth fund, which raised $305 million in 2010. Fund VI has made eight investments and established five portfolio companies, MacTaggart says. The firm’s fifth fund collected $257 million in 2004.
In June, Brynwood announced that its portfolio company, High Ridge, was buying the White Rain personal care brand from Sun Products. (The deal also included brands Adorn, The Dry Look, Mink and Toni.) High Ridge, in April, also acquired the Coast brand of body washes and bar soaps from The Dial Corp. Other fund VI investments include Balance Bar Co., Pearson Candy Co. and Newhall Holdings.
Fund VI is 60% called and Brynwood will likely be fundraising for its next pool sometime in 2013, MacTaggart says. “We will probably need to do another investment before we start thinking about [fundraising]…I have no idea how much we’ll be looking to raise,” he says.
UPDATE: MacTaggart says he expects Brynwood’s fund VII to be “slightly larger” than the firm’s current fund.
Photo courtesy of Brynwood Partners