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PRIVATE EQUITY INVESTING
in Better-for-You Companies
July 25, 2019 @ 8:00 am - 5:00 pm
Products & Services that Are
Better for You, Better for Us,
Better for the Planet
Private Equity Investing
In Better-for-You Companies
Millennial consumers are driving the Better-for-You movement; whether they’re grabbing a cold-pressed juice after their Soul Cycle class, meeting their friends for a Keto or a gluten-free meal, buying organic beauty products online, shining their floors with chemical-free cleaning detergents, feeding their kids Annie’s-brand organic mac & cheese, or just using a battery-powered Tesla, or vacationing at a Costa Rica yoga retreat.
As a result, more and more GPs and LPs and family offices are zeroing in on companies that offer ways to be healthier and to preserve the environment.
For example —
- TSG Consumer Partners’ stake in Nuun, which makes hydration tablets and powders for athletes.
- Kainos Capital’s acquisition of Country Fresh, which produces fresh-cut fruits and vegetables for retail and food service operators.
- New Mountain Capital’s Topix Pharmaceuticals, which acquired DERMA E, a fast-growing purveyor of eco-ethical skincare products.
- NCK Capital’s acquisition of Graybill Processing, a recycling company that converts food waste into value-added feed for farm animals.
- L Catterton’s investment in natural pet food brand “I and love and you” (NatPets LLC).
- Snapdragon Capital’s Xponential Fitness added Pure Barre studios to its family of brands, to become the world’s largest network of fitness boutiques.
However — private equity investors face complex challenges when investing in companies with Better-for-You products and services —
- One is valuation. PE investors feel nervous when venture capitalists and entrepreneurs use multiples of projected revenues instead of multiples of actual proven EBITDAs.
- Another is validation. Investors are concerned about claims made by portfolio companies, and sometimes about their compliance with labeling regulations such as California’s Proposition 65 regarding toxic substances.
- Another is timing. Better-for-You brands certainly are hot at the moment. But if the economy cools, it remains to be seen whether the sector reaches a tipping point and consumers tighten their purses.
Evidence for the strength of the Better-for-You movement comes from several industries — including food and wellness and personal care.
Nielsen’s 2018 food and beverage report shows that —
- Categories that emphasize healthy eating are seeing the strongest growth.
- Snack products with no genetic modifications lead the way, with an 18.2 percent increase in sales in each of the past five years!
- Products free of artificial colors and flavors are up 16.2 percent.
- Snacks with no or reduced sugar content were up 11.3 percent. (By comparison, the average snack product has seen an increase of only 1.2 percent over the same period.)
The Global Wellness Institute reports that the wellness market (everything from boutique fitness gyms to day spas), is now valued at a whopping $4.2 trillion, having grown 12.8% in the last two years.
And according to a 2018 report from Research & Markets, Better-for-You products in the personal care space are also experiencing heightened demand from consumers who are concerned about toxic chemicals in their personal care products. By 2026, the global natural and organic personal care market is expected to reach $26.7 billion.
Large strategic buyers with big traditional brands are scooping up Better-for-You brands that consumers are attracted to, such as —
- Hershey’s acquisition of Krave, a maker of jerky and other meat snacks, for $218.7 million.
- Dr. Pepper Snapple Group’s purchase of Bai Brands, a flavored-water company, for $1.7 billion.
- Kraft Heinz Co.’s recent acquisition of Primal Kitchen, a paleo condiment and dressing company, for about $200 million.
- Unilever’s acquisition of Seventh Generation, which makes natural cleaning products.
- L Catterton and Sorenson Capital sold to Johnson & Johnson its Zarbee’s Naturals, a maker of natural health and wellness products.
- PepsiCo agreed to acquire Bare Snacks — a maker of baked fruit and vegetable snacks from Avrio Capital, NGEN Partners, and Silas Capital.
- Castanea Partners’ First Aid Beauty, a maker of cruelty-free beauty and skincare products, was acquired by Proctor and Gamble in July 2018
Duane K. Stullich
Co-Founder & Managing Partner
Thursday, July 25
8:00am – 5:00pm
Midtown Manhattan, NY
Register now to gain valuable insights as 20-plus speakers assess the outlook
for Better-for-You companies at
The Capital Roundtable’s all-day conference
on Thursday, July 25, in Midtown New York City.
- Beyond food-related companies, what are some of the attractive niches in the Better-for-You sector?
- Are private equity firms overpaying for Better-for-You companies?
- How do you scale Better-for-You companies?
- What are the most compelling exit opportunities?
- How to protect Better-for-You portfolio companies in a downturn?
- What are the hot segments among Better-For-You companies?
- What specific aspects of Better-for-You companies should investors be wary of?
- How to value Better-for-You companies?
- What are purchase multiples typically based on?
- How to sell to large strategic acquirers?
Recent Middle-Market “Better-for-You” Deals
- LFE Capital invested in online mindfulness training program provider eMindful.
- LNK Partners sold its minority stake in Beachbody, which provides fitness and weight-loss solutions, to an undisclosed buyer.
- Norwest Equity Partners invested in the Institute for Integrative Nutrition, a health coaching school.
- L Catterton sold premium pet food and pet snack company Ainsworth Pet Nutrition for $1.9 billion to jam and jelly maker J.M. Smucker.
- NextWorld Evergreen invested in clean beauty chain Credo and plant-based color cosmetic brand W3II People.
- TPG Growth sold Angie’s Artisan Treats, which makes Angie’s Boomchickapop, a gluten-free, non-GMO whole grain popcorn, to Conagra Brands
Duane Stullich is a noted investment banker experienced in advising stakeholders of middle-market companies on M&A, private placements of debt and equity, and special situations, including corporate bankruptcies.
In just the past year, he closed transactions with total aggregate value of approximately $1 billion. Recently, he was named to the Los Angeles Business Journal’s “LA 500” – which recognizes the 500 most influential people in the city.
Previously, he helped establish the corporate finance department at Houlihan Lokey. He has also served on various boards and is chairman emeritus of the International Association of Investment Bankers.
He was graduated summa cum laude with a BA in accounting and received an MBA from UCLA’s Anderson School of Management.
This Capital Roundtable conference in midtown, New York City, is all-business, all-targeted, all-designed to be a completely focused day of practical information and revealing insights about better-for-you companies. You’ll gain valuable insights from —
- Three informative panel discussions
- Two revealing keynote presentations
- Real-world perspectives from company investors
- Industry outlooks from noted sector experts
- War stories and lessons learned from experienced hands
- Duane K. Stullich, Co-Founder & Managing Partner, FocalPoint Partners
- Burt Alimansky, Chairman & CEO, The Capital Roundtable
Preliminary Speaker List
- Daniel Bonoff, Partner, Goode Partners LLC
- Robert L. Brown, Co-Founder & Managing Director, Encore Consumer Capital
- Christopher Carey, Partner, Stripes Group LLC
- Leslie Frecon, Managing Partner, LFE Capital
- Peter S.H. Grubstein, Managing Director & Founder, NGEN Partners
- Kayvan Heravi, Partner, LNK Partners LLC
- Brett A. Hickey, Chief Executive Officer, Star Mountain Capital LLC
- Nick McCoy, Managing Director, Whipstitch Capital
- John J. Novak, Managing Director, Paine Schwartz Partners LLC
- Mike Schall, Sr. Coordinator–Global Growth & Business Development, Whole Foods Market Inc.
- Jared R. Stein, Partner, Monogram Capital Partners
- Sarah B. Tomolonius, Co-Founder, Sustainability Investment Leadership Council
- David T. Tswamuno, Partner, Emil Capital Partners LLC
- Simon Wong, Dir.–Transformation, Hain Celestial Group Inc.
7:30am – 8:30am
Networking & Registration & Breakfast
8:30am – 9:00am
Welcoming Remarks & Audience Self-Introductions
9:00am – 9:30am
Conference Chair’s Introduction
- Duane K. Stullich, FocalPoint Partners
9:30am – 10:30am
Better for Us, Better for the Planet — Trends with the Most Potential for PE Investors
10:30am – 11:15am
Networking & Coffee
11:15am – 12:00pm
Doing Well by Doing Good — Using PE Investments to Make a Difference
12:00pm – 12:30pm
12:30pm – 01:30pm
Networking & Luncheon
1:30pm – 2:30pm
Freshness & Flavor Compete with Long Shelf Life — Latest Ingredients Trends in the Food Industry
2:30pm – 2:45pm
Networking & Dessert
2:45pm – 3:30pm
Clear & Clean Labeling — Avoiding Litigation by Baring the Facts
3:30pm – 4:30pm
Where Technology & Wellness Meet — PE Investment Opportunities in Improving Your Health
Networking & Adjournment
Space at this conference is limited, so register as soon as possible to assure yourself a seat. To avoid disappointment, please contact Chris Agar today to confirm your attendance at 212-832-7300 ext. 0 or firstname.lastname@example.org.
Please note that Capital Roundtable limits the number of registrants from a single firm to three.
Best Rate – Early Registration
Save $300 off the standard fee of $1,495 when you register by Friday, June 7. Just $1,195.
Save $200 of the standard fee! Register by Friday, June 28, and the fee for the conference is $1,295.
$1,495 increasing to $1,595 day of conference, space permitting.
$1095 each, when you register two or more people to attend from the same company.
You can pay by credit card (using the links above or below) or by check. Mail your check and business card to: New York Business Roundtable Inc., 747 Third Avenue, Suite 200, New York, NY 10017.
Can’t attend but want to hear the program? You can buy the audio package along with the handounts.
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