NCN NEWS for August 18, 2017
Kill Cliff receives minority investment
Sunrise Strategic Partners has made a minority investment in Kill Cliff (Atlanta, Ga.), a recovery and hydration sports drink. Kill Cliff was created by Todd Ehrlich, a former Navy Seal, as a healthier alternative to soda, sports drinks and other post workout beverages. The investment will be used for distribution and marketing. Kill Cliff says it is a leading brand in CrossFit gyms, USA Weightlifting gyms, Vitamin Shoppe, and GNC stores, as well as a favorite at stores on Navy and Marine Corps bases. Kill Cliff is also available at Amazon, Whole Foods, Kroger, Hy-Vee and other retailers. Kill Cliff was a Presenting Company at the NCN XIX Investor Meeting in 2016. Whipstitch Capital, an NCN Sponsor and Investment Banking Partner, served as the exclusive financial advisor to Kill Cliff.
Aker BioMarine and Neptune close $34 million transaction
Aker BioMarine Antarctic AS (Lysaker, Norway) has acquired Neptune Technologies & Bioressources Inc. (Laval, Quebec, Canada), including its krill oil inventory, customers, NKO ingredient brand, and IP for $34 million in cash. Proceeds will be used to reduce debt, for acquisitions, and for growth segments such as cannabis oil extraction. “This acquisition will allow us to increase investments in science and product innovation, sustainable krill-harvesting practices, and marketing support for our customers, which in turn will build excitement and accelerate growth in the omega-3 market,” said Matts Johansen, CEO of Aker BioMarine. “The marriage of these two brands is significant for the krill oil business.” Neptune will stay in the krill oil business via its investment in Acasti Pharma Inc. and will still offer finished products such as krill oil soft gel capsules via its Solutions Business in partnership with Aker BioMarine.
Wellnext acquires NeoCell collagen supplements
Wellnext LLC (Sunrise, Fla.), a vertically integrated developer, manufacturer and marketer of nutritional supplements, has acquired NeoCell (Irvine, Calif.), a collagen supplement company. NeoCell specializes in supplements for joint, bone and muscle health based on collagen, biotin, hyaluronic acid and other ingredients. Over the last 15 years Wellnext has acquired Rainbow Light, Iceland Health, Champion Nutrition, Blessed Herbs, Sedona Labs, and Nutri-Health. Wellnext is a platform company of WM Partners which recently announced the final closing of its first fund with over $307 million in commitments. WM Partners is an NCN Cornerstone Investor.
DSM leads $25 million second tranche for Amyris
Amyris Inc. (Emeryville, Calif.), an industrial bioscience company, has announced agreements for $50 million in equity financing as part of the second tranche of its previously announced financing. The second tranche is being led by a $25-million investment from Royal DSM with the remaining $25 million contributed by Vivo Capital. Amyris converts plant sugars into hydrocarbon molecules and produces specialty ingredients and consumer products, including flavors and fragrances, cosmetics ingredients, pharmaceuticals, and nutraceuticals. DSM is an NCN Cornerstone Investor.
Captek Softgel acquires J+D Labs
Captek Softgel International Inc. (CSI, Cerritos, Calif.), a contract manufacturer of custom dietary supplements, has acquired J+D Labs Pharma Manufacturing Inc. (Vista, Calif.). In business for more than 25 years, J+D produces 1,000-plus formulations and recently launched NutraStock brand bulk dietary supplements made in the United States. The newly joined companies will manufacture in both Cerritos and Vista and have more than 300,000 square feet of manufacturing, warehousing, and analytical testing labs. Captek Softgel is a portfolio company of Swander Pace Capital whose other investments in the nutritional supplement industry include Swanson Health Products and Reliance Holdings; previously it invested in ReNew Life Formulas and Santa Cruz Nutritionals.
Vetted raises seed round to develop at-home veterinary care model
Vetted (Los Angeles, Calif.) has announced a $3.3 million dollar seed round of funding led by Foundation Capital, with Amplify LA participating. Vetted provides affordable in-home veterinary services that include wellness exams, non-emergency sick visits, vaccinations, diagnostics and treatment. Vetted will use funds to expand beyond Los Angeles and to recruit veterinarians. “We’re providing a personalized experience for pets, in the comfort of their own homes, in way less time and with less stress than the other options available on the market right now,” said co-founder, Ali Shahid. “Plus, by removing infrastructure costs… we’ve been able to cut the price of overall care by 50%.” A comprehensive house call exam including video or phone follow up costs $99.
MATI increases funding for healthy energy beverages
MATI LLC (Durham, N.C.), a maker of healthy energy beverages low in calories and with no added sugar, has raised $2.55 million in Series A financing, following a $2.5 million close in April. “We thought we had completed our financing this year, but there was so much interest and excitement from investors who saw the opportunity after our last close, we decided to expand the round. With the $5 million raised this year, we will now be able to expand our footprint to much more of the Southeast,” said founder and CEO Tatiana Birgisson. MATI makes small batch healthy energy drinks using a proprietary process to brew guayusa, a traditional Amazonian tea that contains naturally occurring caffeine and antioxidants. The investment brings total outside equity funding since launch to over $8 million.
Garden Fresh salad bar chain acquired by two private equity investors
Garden Fresh Restaurants (San Diego, Calif.), the parent of the Souplantation and Sweet Tomatoes salad bar chains, has been acquired by Perpetual Capital Partners and CR3 Capital. The acquisition follows bankruptcy proceedings earlier this year and provides a long-term ownership base for the company. CR3 Partners led the restructuring and has been managing the company for several months. Garden Fresh operates 97 restaurants in nine states and is known for its self-serve salad bars, soups, pastas, freshly baked breads, muffins and desserts.
Ritual Vitamins raises $10.5 million Series A
Ritual Vitamins (Los Angeles, Calif.) has raised $10.5 million in Series A funding led by Founders Fund. The online startup offers for $30 per month a supply of 60 supplements designed for women. The company’s point of differentiation is transparency and traceability: Ritual’s ingredients webpage lists nine essential nutrients for women, including country of origin, manufacturer, dosage, form, benefits, and how they complement one another. Supplements are non-GMO, vegan, gluten and soy free, and contain no synthetic fillers or colorants. Ritual was founded by CEO Katerina Schneider, previously a venture partner with the investment fund AF Square. The company has reportedly raised a total of $15.3 million to date.
Co-op partners with Well Canada on cold-pressed juice brand
Well Canada (Calgary, Alberta), a cold-pressed juice and super food beverage brand, has launched a co-branded label with Co-op. “Co-op was looking to add to its Co-Op Gold Pure line of private-label products, and we loved the fit with Well’s mission to offer only the best health and wellness-related products,” said Well Co-founder and CEO Zack Lister. The co-branded label will launch with five cold-pressed juices, three flavors of kombucha and a cold-brew coffee. Well Canada was founded by Calgarians Lister and Jeff Tumbach in 2014 as a home juicing operation.
Banza raises $7.5 million for chickpea pasta
Banza (Detroit, Mich.), a company that makes pasta from chickpeas, has closed a $7.5 million Series A investment led by Beechwood Capital. Other participants include Strand Equity Partners and RSE Ventures. Funding will be used to increase production, develop new products, and support growth. Banza was founded in 2014 by brothers Brian and Scott Rudolph, gaining recognition as one of Time magazine’s 25 Best Inventions of 2015. It has since expanded to 5,000 stores nationwide. Banza’s pasta has 25g protein and 40% fewer net carbs per serving than regular pasta “The company is in a position to take market share in an often-forgotten territory in the consumer goods space—the dinner table—and we see a significant opportunity to help accelerate the brand’s growth and development,” said Larry Kahn, partner and managing director at Beechwood Capital. Strand Equity also recently invested in chickpea snack firm Hippeas.
YogaWorks raises $40 million from IPO
YogaWorks (Culver City, Calif.) has generated $40 million in gross proceeds from an August IPO rather than the approximately $58.1 million projected in its prospectus. IPO pricing was reduced from $13 per share to $5.50 per share and ended the day trading below $5 on Nasdaq. YogaWorks has 50 studios nationally, mostly built by acquisition, and an Internet-based digital media service. The company had net revenues of $55.1 million in 2016 reflecting a CAGR of 10.9% since 2012, and a net loss of $9.5 million. The IPO followed a discouraging public debut by meal kit company Blue Apron, reflecting investors’ reluctance to pay a premium for unprofitable companies with unproven business models, analysts suggested. YogaWorks was acquired by Great Hill Partners from Highland Capital Partners for around $45 million in July 2014.
Calyxt raises $64.4 million in IPO, shares trade up
Calyxt Inc. (Minneapolis, Minn.) raised approximately $64.4 million in proceeds from its IPO in July. Calyxt uses gene-editing technology to deliver specialty food ingredients like healthier oils and high fiber wheat for consumers, in addition to agriculturally advantageous traits such as herbicide tolerance to farmers. Net proceeds were originally estimated at $104.8 million based on an IPO price of $16.50, which was later reduced to $8 per share. Calyxt shares were trading at over $12 in mid August. According to an article in Biofuels Digest, demand is light for early-stage companies with emerging revenue streams even if the technology is outstanding; and despite the potential value in gene editing, especially in agriculture, business models are as yet unproven. Calyxt is a wholly owned subsidiary of Cellectis SA of France.
Unilever to buy Weis natural ice cream in Australia
Unilever (Rotterdam, The Netherlands) is to acquire Weis (Toowoomba, Queensland), a second-generation Australian ice cream and frozen dessert manufacturer founded in 1957 with the original iconic Fruito Bar. Weis ice creams will continue to be made in Weis’ factory in Toowoomba using locally sourced, natural and high-quality ingredients, Unilever stated: “Weis’ values and products will help meet increased consumer demand for ice cream made with premium ingredients, joining Unilever brands Grom, Ben & Jerry’s and Talenti in this high-growth segment.” Unilever is an NCN Cornerstone Investor.
Kerry’s Taste & Nutrition division up 4.8% in first half
Irish food and ingredients firm Kerry (Tralee, Ireland) has posted a revenue increase of 4.8% to €3.2 billion for the first half of 2017. Kerry’s Taste & Nutrition division had 4.2% volume growth. According to the company, “Consumer trends favoring clean label, nutritious, tasteful, natural and convenient food and beverage offerings continue to drive a strong innovation pipeline across all end-use markets in all regions.” Kerry is an NCN Cornerstone Investor.
Meat processor Smithfield Foods invests $25 million in Chef’d
Chef’d (El Segundo, Calif.) has raised $35.21 million, according to a recent SEC filing. CNBC reported that Smithfield Foods (Smithfield, Va.) invested $25 million, with Campbell Soup contributing a previously announced $10 million to the round; $200,000 came from online grocer Fresh Direct. The news buoys the meal kit delivery sector following a disappointing IPO for Blue Apron Inc. at the end of June. Blue Apron reported a bigger net loss than expected in its first report as a public company, and in August shares fell to $5 or half of the company’s IPO price.
Waterloo Sparkling Water raises Series A, enters national distribution
Waterloo Sparkling Water (Austin, Texas) will hit shelves nationwide in early September 2017 following a recently closed $3 million Series A round led by CAVU Ventures. The company is advised by general partners Clayton Christopher, co-founder of Sweet Leaf Tea and Deep Eddy Vodka, and Rohan Oza, who marketed vitaminwater before it was sold to Coca-Cola for over $4 billion. Waterloo said it intends to make its mark by delivering a richer, more authentic fruit taste and aroma than other flavored waters. Waterloo will be available in all U.S. Whole Foods Market locations beginning in September, with other retailers to follow. Jason Shiver, former President of North America at Amplify Snack Brands (SkinnyPop), recently came on board as CEO of Waterloo.
GreenSpace buys Cedar
Canadian food manufacturer GreenSpace Brands has acquired the owner of juice brand Cedar in a deal worth up to $5 million. Cedar, under the ownership of Toronto-based The Cold Press Corporation, makes a variety of premium cold-pressed juices and probiotic-enriched drinks, which are sold through ‘major consumer retail channels’ in Canada. In the three months to the end of July, the Cedar brand generated gross revenue of approximately CAD 1.25 million ($0.99 million), representing year-on-year growth of 200%.
Mars buys Tasty Bite brand
Mars Inc. has entered into an agreement to acquire Preferred Brands International, a manufacturer and marketer of Indian and Asian food products sold primarily under the Tasty Bite brand. The acquisition of Preferred Brands will add to Mars’ roster of food businesses, which includes Uncle Ben’s, Masterfoods, Dolmio, Seeds of Change and others.
GrubHub acquires Eat24 delivery
GrubHub (Chicago) has announced the acquisition of delivery and takeout company Eat24 (San Francisco) from Yelp Inc. (San Francisco) for $288 million. Yelp paid $134 million for Eat24 in February 2015. M&A activity among food delivery startups has seen a massive increase in recent years as venture capital funding has declined, and as smaller players in the space seek to be acquired, or risk shutting down, according to CB Insights. Among all food delivery startups, 28 mergers or acquisitions took place between 2012 and 2014. This rose to 41 M&As in 2015, 31 in 2016, and 15 so far this year as of August 7, 2017, CB Insights reported.
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