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Falfurrias Now Popcorn Seasoning King

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Sauer Brands, a portfolio company of Falfurrias Capital Partners, has acquired Chicago Custom Foods from Highlander Partners. Highlander acquired the company in January 2018 from VMG Partners.

Chicago Custom Foods (CCF) is a maker of branded popcorn seasonings, a category it created in 2000 with the introduction of Kernel Season’s which, according to the company, is America’s number one selling brand with more than 20 popcorn flavors ranging from simple butter and white cheddar to garlic parmesan and cheesy caramel corn.

CCF’s products are sold through more than 22,000 retailers in North America and internationally. The company’s popcorn seasonings are also available in movie theaters that operate more than 32,000 screens in more than 30 countries. CCF, led by CEO Jason Roy, was founded in 2000 and is headquartered near Chicago in Elk Grove Village.

“We are excited about the new opportunities with Sauer Brands, and also very appreciative of the support that Highlander provided during our tenure,” said Mr. Roy. “We are ready for the future and the team is energized by the possibilities and new opportunities. Our Kernel Season’s brand has exceptional consumer awareness and we are equally excited about our new brands and product offerings, too.”

Sauer Brands was formed by Falfurrias in June 2019 to acquire the food business assets of The C.F. Sauer Company. Sauer manufactures a line of condiments, spices, seasonings, and extracts, including well-known brands such as Duke’s Mayonnaise, The Spice Hunter, Sauer’s, Gold Medal, and BAMA. The company’s regional brands and private-label products are sold through the retail and foodservice channels.

Sauer, founded in 1887 by Conrad Frederick Sauer, has more than 850 employees and manufacturing facilities in Richmond, Virginia (headquarters); Mauldin, South Carolina; New Century, Kansas; and San Luis Obispo, California.

During Highlander’s ownership, CCF expanded its product line with the introduction of Tasty Shakes oatmeal mix-ins, Veggie Season’s vegetable seasonings, and Truffle Season’s truffle-flavored popcorn seasonings which is set for release later this year.

“This sale marks the culmination of a very deliberate strategy of broadening the product line through additional flavors to existing products and introducing new seasoning offerings for use with other product categories,” said Jeff Hull, president and CEO of Highlander. “The management team, led by CEO Jason Roy, has driven tremendous growth through innovation, new customer penetration and increased consumer awareness.”

Highlander makes investments in middle-market businesses in targeted industries in which the principals of the firm have significant operating and investing experience. Sectors of interest include manufacturing, consumer products, industrial goods, automotive accessories, packaging, food and beverage, and specialty chemicals. The firm has over $2 billion in assets under management and is based in Dallas.

Falfurrias makes equity investments in growth-oriented middle-market companies that have revenues in excess of $10 million and EBITDAs in excess of $2 million. In February 2019, Falfurrias closed its latest fund, Falfurrias Capital Partners IV LP, at its hard cap of $500 million. The firm’s earlier fund closed with $275 million of capital in March 2017. Falfurrias was founded in 2006 by Hugh McColl Jr., former chairman and CEO of Bank of America, and Marc Oken, former CFO of Bank of America, and is based in Charlotte, North Carolina.

BlackArch Partners was the financial advisor to CCF on this transaction.

Private Equity Professional | May 7, 2020

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Source: https://peprofessional.com/2020/05/falfurrias-now-popcorn-seasoning-king/

Private Equity

What should startup founders know before negotiating with corporate VCs?

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Corporate venture capitalists (CVCs) are booming in the startup space as large companies look to take advantage of the fast-paced innovation and original thinking that entrepreneurs offer.

For startups, taking funding from CVCs can come with many benefits, including new opportunities for marketing, partnerships and sales channels. Still, no founder should consider a corporate investor “just another VC.” CVCs come with their own set of priorities, strategic objectives and rules.

When it comes to choosing a CVC with which to enter negotiations, the most important step is doing your own diligence beforehand. An entrepreneur’s goal is to find the perfect match to partner with and guide you as you grow your business. So before you start discussing terms, you’ll want to understand what’s driving the CVC’s interest in venture investing.

While traditional VCs are purely financially driven, CVCs can be in the venture game for a variety of reasons, including finding new technology that might generate marketplace demand for their products. An example is Amazon’s Alexa fund, which invested into emerging companies that drive use and adoption of Alexa. Alternatively, a CVC’s parent company may be looking to invest in tech that will help them operate their own products more efficiently, such as Comcast Ventures investing in DocuSign.

As a rule of thumb, the bigger CVC funds like GV and Comcast tend to be financially driven, meaning they’ll be approaching negotiations through a financial lens. As such, the negotiating process more closely resembles an institutional fund. You as a founder have to do the work to figure out what’s driving your CVC — is this a customer acquisition or distribution opportunity? Or are they seeking to find a source of knowledge transfer and/or bring new tech into their parent company?

“Before negotiating, always look at a CVC’s existing portfolio,” says Rick Prostko, managing director at Comcast Ventures. “Have they made a lot of investments, at what stage, and with whom? From this information you’ll see the strategic thinking of the CVC, and you can determine how best to position yourself when you begin negotiations.”

Source: https://techcrunch.com/2020/05/26/what-should-startup-founders-know-before-negotiating-with-corporate-vcs/

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Sterling Group files to raise $1.75bn for fifth flagship fund

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Mid-market Texas buyout house The Sterling Group has filed to raise up to $1.75bn for its fifth flagship fund.
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Source: https://www.altassets.net/private-equity-news/by-pe-sector/buyout/sterling-group-files-to-raise-1-75bn-for-fifth-flagship-fund.html

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Private Equity

Biotech continues strong PE, VC investment run in 2020

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The biotech sector has continued its robust start to the year for private equity and venture capital dealmaking, despite

Source: https://www.altassets.net/knowledge-bank/by-pe-focus/large-buyouts/biotech-continues-strong-pe-vc-investment-run-in-2020.html

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