US PE deal-making is on a record-setting pace through Q2 with more than 3,700 deals worth more than $450 billion, thanks to the continued economic recovery, low interest rates and robust dry powder stores, according to Pitchbook’s Q2 ’21 US PE Breakdown.
While the conventional wisdom has it that summer in financial services is a time for unplugging, beach reads and maybe a Mai Tai – or at least enough of a break from the action to focus on longer-term strategic priorities – this summer seems to have been a little different, writes PE Hub affiliate Private Equity International. Read it here.
Vitamins craze: In this morning’s big headlines, Dallas private equity firm Highlander Partners is selling Bettera Holdings to drug development services company Catalent for $1 billion.
Bettera, the parent of nutritional supplements company Better Brands — known for its soft-chew gummy products — was launched by Highlander through a series of four acquisitions beginning in 2017. Bettera’s sales last year totaled about $150 million and are forecast to grow at least 20 percent annually in the short term, the Wall Street Journal reported, citing people familiar with the matter.
Bettera joins a flurry of dealmaking in recent months falling in the nutritional vitamins, minerals and supplements industry. In August, Butterfly invested in MaryRuth Organics, and in July, WM Partners bought Vega and Satori Capital invested in Formulife.
Firms like Avista Capital Partners, KKR and Carlyle have meanwhile proven the category is a smart place to park their $$.
PE Hub reported in August that Avista is poised to make 3.7x its money with its recent sale of Arcadia Consumer Healthcare, whose consumer healthcare portfolio includes premium vitamin and nutritional supplements in addition to OTC medicines. And in May, KKR was set to make north of 3x its investment in Bountiful, whereas Carlyle was poised to make 2.5 its money, PE Hub wrote. Bountiful commanded a whopping $5.75 billion valuation.
Cashing in: In other recent sales of note, Linden Capital Partners made almost 4.5 times its money on the recent sale of medical device parts manufacturer Flexan, according to an LP source with knowledge of the matter. Announced in late July, New Mountain Capital acquired Flexan through ILC Dover, marking the second add-on for the manufacturer of flexible materials since partnering with the PE firm in early 2020. The deal closed just over a week ago.
Since Linden in February 2015 acquired Flexan, the company has invested in its facilities, capabilities and corporate infrastructure. The platform expanded with the acquisition of two companies based out of Salt Lake City while recruiting several seasoned members to the C-suite.
Linden’s strong outcome with Flexan and other recent exits is likely benefiting its roll-out of Fund V. The firm’s fifth buyout offering, which has a $3 billion hard-cap, is fast-approaching an initial close of more than $2 billion, limited partner sources told Buyouts in May. Linden, meanwhile, is working with William Blair on a sale process for Smile Doctors, the country’s largest and fastest-growing orthodontics-focused dental services organization.
That’s it! Have a great rest week ahead, and as always, write to me at email@example.com with any tips, feedback or just to say hello!
Update: This report has been updated to clarify that Butterfly invested in, rather than bought, MaryRuth Organics.