Kodiak Desserts bought by personal fairness agency L Catterton

Dive Transient:

  • Pancake maker Kodiak Desserts is being acquired by personal fairness agency L Catterton for an undisclosed quantity, the businesses stated in an announcement. 
  • Kodiak has expanded into waffle mixes, frozen waffles, oatmeal, baking mixes and quite a lot of snacking merchandise. Its better-for-you choices are at the moment offered in 26,000 retail areas, together with Goal, Walmart and Costco.
  • The sale comes because the pandemic has elevated shopper demand for more healthy merchandise. On the similar time, persons are spending extra time at dwelling making meals, with breakfast among the many greatest beneficiaries.

Dive Perception:

Kodiak started when eight-year-old Joel Clark started promoting his household’s hand-milled flapjack combine door to door from somewhat purple wagon. Right now, the fast-growing Kodiak’s income has elevated greater than 50 instances since 2013 when the model appeared on the tv program Shark Tank.

Whereas little is understood in regards to the firm’s gross sales or how a lot L Catterton is paying to amass its majority stake, it is not exhausting to see why Kodiak — which has lengthy been rumored has an acquisition goal — was bought.

It is a rapidly rising model that’s benefiting from shopper demand for more healthy meals and the truth that persons are spending extra time at dwelling throughout COVID-19. Kodiak additionally has thrived as a result of its merchandise use wholesome elements like entire grains and are loaded with protein. 

Kodiak’s current shareholders, together with Dawn Strategic Companions, Trilantic North America and the corporate’s founders and administration group, will proceed to personal a big minority stake.

L Catterton isn’t any stranger to purchasing and promoting within the CPG house.

Practically a decade in the past it offered Plum Organics to Campbell Soup. In 2017, it divested Ferrara Sweet, the maker of Brach’s, RedHots and Trolli, to Nutella maker Ferrero. And last November, McCormick & Co. bought hot-sauce maker Cholula from the personal fairness agency for $800 million. Different present and and former investments embrace Kettle Chips, YoCrunch and Candy Leaf Tea.

The personal fairness agency’s earlier expertise in meals was an enormous motive Kodiak selected a sale. “L Catterton shares our imaginative and prescient, and their monitor file of serving to develop iconic CPG manufacturers makes the agency a really perfect accomplice for Kodiak as we proceed to propel our enterprise ahead,” stated Clark, who right this moment serves as CEO.

Kodiak will undoubtedly profit from L Catterton’s capacity to faucet into its trade connections to construct manufacturers and enhance gross sales. Different corporations and numerous startups are getting into the better-for-you breakfast and snack classes as nicely, so Kodiak, regardless of its popularity, will face cutthroat competitors going ahead.

Most personal fairness corporations purchase manufacturers or firms with the aim of boosting their worth earlier than ultimately promoting them in a while with a revenue. L Catterton has a vested curiosity in seeing Kodiak succeed so it may possibly acquire financially from its funding. The truth that current buyers of Kodiak, together with its founders and administration group, plan to retain their stake reveals they imagine within the long-term prospects of the enterprise and would proceed to learn from any success.

More healthy choices have lengthy been a beautiful acquisition goal. Bar maker Type was bought by Mars for an estimated price ticket final 12 months that valued it at greater than $5 billion. In March, Nestlé bought purposeful beverage maker Essentia Water. And simply final week, Hershey agreed to purchase low-sugar confectionery model Lily’s as a part of its efforts to extend its portfolio of better-for-you confections. 

For meals startups in the appropriate house on the proper time, they’ve the higher hand to be extra selective to find the proper purchaser and price ticket for his or her enterprise. After years of reportedly saying they weren’t open to a sale, Kodiak’s buyers have apparently determined the appropriate time is now.

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