North Castle Partners announced today that it has acquired a controlling interest in Sprout Organic Foods Inc. ("Sprout"), a developer, marketer, and distributor of premium organic foods, primarily serving the baby/toddler market. For North Castle Partners, a leading private equity firm focused on consumer businesses that promote healthy, active and sustainable living, this transaction represents its fourth investment in the natural and organic nutrition sector. The terms of the investment were not disclosed.
Sprout first revolutionized the baby food category by pioneering the launch of the organic pouch segment. While many brands tout organic ingredients, Sprout's commitment to babies goes far beyond organically grown vegetables, fruits, grains and proteins. Utilizing specialized pouches and slow cook technology, Sprout's chef-inspired recipes are free of water-reconstituted concentrates, fillers, preservatives and acidifiers. The company's products are sold through most national and natural/specialty grocers as well through on-line retailers.
"We are excited about the Sprout acquisition as our latest nutrition platform that addresses the needs of today's consumers. The organic baby food category is an attractive market with strong underlying fundamentals. Sprout is a strong brand that resonates with retailers and consumers, with a product portfolio that has meaningful competitive differentiation," said Alison Minter, North Castle managing director.
"Providing consumers with healthy/better-for-you nutrition options is vital to North Castle's mission to build industry leading companies in the healthy, active and sustainable living market," said North Castle Managing Partner Chip Baird.
"North Castle has extensive experience and an expansive network within the natural and organic food space, not only from our investments in Naked Juice, Bora Bora Organic Foods, and Flatout Flatbreads, but also from our experience with North Castle portfolio companies who sell through the grocery, natural, mass, ecommerce and other specialty retailers," stated Minter.
"At the foundation of our approach is to partner with exceptional management teams and industry professionals to unlock the full potential performance of these companies," commented Baird. "We are pleased to announce that industry veteran Rick Klauser, formerly the chief marketing and medical sales officer for U.S. infant nutrition at Nestle (Gerber), will become the CEO of Sprout, effective immediately."
"I am proud to partner with the North Castle team and their commitment to focus their network of Nutrition Health and Wellness sector experts against the needs of our most important resources…infants. We are passionately committed to investing behind such an important mission to expand the accessibility of this small independent brand offering one of the cleanest, preservative free, honestly labeled organic line of recipes I've ever seen," said Klauser.
Earlier this year, North Castle Partners sold Flatout Inc., a leading manufacturer and marketer of highly differentiated, premium and better-for-you flatbreads and flatbread products, to T. Marzetti Company, a wholly-owned subsidiary of Lancaster Colony Corp.
BellMark Partners served as financial advisor to Sprout in the transaction.