NCN News for December 21, 2017

Lumen raises $13 million for biotech platform based on spirulina

Lumen Bioscience (Seattle, Wash.), a synthetic biology company focused on developing the blue-green algae spirulina as a production platform for high-value proteins and other molecules for foods, cosmetics and medicine, has raised $13 million in new capital. The round includes a Series A investment totaling $11.2 million and a $1.8 million grant from the U.S. Department of Energy. Financing was led by Avista Development, BioEconomy Capital, company founders and biotech investors. Lumen’s first product is a natural blue colorant for high purity applications in the food and cosmetics industries. “For years, demand has grown for natural alternatives to food and cosmetics with artificial colors made from petroleum and coal tar, which many believe to be unhealthy. But high cost and variable quality have held back natural colors from being widely adopted,” said Brian Finrow, Lumen’s CEO and co-founder. The market for natural colorants is worth $1.5 billion, according to data cited by the company.

Lakeview Equity invests in NutriScience Innovations

Lakeview Equity Partners LLC has invested in NutriScience Innovations LLC (Trumbull, Conn.), a cGMP-certified global supplier of nutritional and functional ingredients, including branded and natural and organic ingredients. Lakeview also acquired the assets of NutriScience’s sister company FabriChem Inc., a pharmaceutical and specialty chemical raw materials supplier. The NutriScience-FabriChem group was established in 1993 by the Pallathra family, which will retain an ownership interest. Lakeview Equity acquired the probiotics developer and manufacturer UAS Labs (Wausau, Wis.) in 2013.

Campbell to buy Snyder’s-Lance snacks for $4.87 billion

Campbell Soup Company (Camden, N.J.) has agreed to acquire Snyder’s-Lance (Charlotte, N.C.) for $4.87 billion in cash. Snyder’s-Lance reported $2.2 billion in net sales for the trailing 12 months ended Sept. 30, 2017, and the purchase price represents a premium of approximately 27% to Snyder’s-Lance’s closing stock price on Dec. 13, 2017. Snyder’s-Lance brands include Late July organic chips and crackers, Emerald nuts, Cape Cod non-GMO chips, EatSmart veggie crisps and Kettle chips. Campbell said that with the addition of Snyder’s-Lance, snacking would represent approximately 46% of Campbell’s annual net sales (previously 31%) on a pro forma basis. Campbell’s soup portfolio, including Pacific Foods, would represent approximately 27% of the company’s annual net sales. Campbell closed the acquisition of organic broth and soup producer Pacific Foods in December. Campbell Soup is an NCN Cornerstone Investor.

Amplify strengthens Hershey’s position in snacking

The Hershey Company (Hershey, Pa.) has agreed to acquire Amplify Snack Brands Inc. (Austin, Texas) in a transaction structured as a tender offer followed by a merger and valued at approximately $1.6 billion, including debt. The deal represents a multiple of approximately 14.8-times 2017 adjusted EBITDA, Hershey said. Founded in 2014, Amplify focuses on better-for-you snacks like SkinnyPop popcorn, Oatmega whey protein bars, Paqui corn chips, and Tyrrell’s potato chips. “The acquisition of Amplify… is an important step in our journey to becoming an innovative snacking powerhouse,” said Michele Buck, Hershey president and CEO. Amplify’s largest shareholder is TA Associates, which invested in the snack company in 2014. Amplify was taken public in 2015.

Tyson Foods makes additional investment in Beyond Meat

Tyson Foods Inc. (Springdale, Ark.) has participated in a $55 million financing round in the plant-based protein producer Beyond Meat (El Segundo, Calif.). Tyson Foods’ latest investment slightly increases its ownership stake in Beyond Meat from the 5% established a year ago. This financing round was led by Cleveland Avenue LLC, the venture capital firm founded by Don Thompson, former CEO of McDonald’s Corporation. According to Beyond Meat, funds will be used to more than triple the size of its production footprint, fund R&D, and expand sales and distribution. Beyond Meat’s portfolio of meat alternatives are sold at more than 19,000 retail outlets nationwide.

NadaMoo! announces growth capital and strategic partnership

NadaMoo! (Austin, Texas), a dairy-free frozen dessert company, has partnered with InvestEco Capital and closed a $4 million funding round. NadaMoo! desserts are made with organic coconut milk and sweetened with agave nectar; they have roughly half the fat and calories of regular ice cream and other dairy-free alternatives, and use Fair Trade certified ingredients, NadaMoo! said. Other investors in the round are Canada-based District Ventures and Working Lab Capital. NadaMoo! is available in natural, conventional, specialty, and co-op grocery stores nationwide. According to Future Market Insights, the global market for plant-based ice cream will reach $1 billion by the end of 2017, spurred by lactose intolerance and demand for healthier ice cream options.

Arzeda closes $15 million Series A round

Arzeda (Seattle, Wash.), a company using computational and synthetic biology to create new enzymes, proteins, and chemicals that offer advantages in terms of performance, cost and sustainability, has closed a $15.2 million Series A round. Arzeda raised an additional $3.2 million since announcing an initial $12 million raise in July. New investors in the Series A include Universal Materials Incubator and Casdin Capital, which join Series A lead investor OS Fund and others. Arzeda says it has already developed proteins for global manufacturers such as DuPont and Mitsubishi Chemical to reduce the cost of producing high-value food ingredients; improve crop yield and resilience; and increase the performance and sustainability of advanced polymers.

Arca Continental acquires Deep River Snacks

Arca Continental (Monterrey, Mexico), the second largest Coca-Cola bottler in Latin America and parent company of Wise Snacks, has acquired Deep River Snacks (Deep River, Conn.), a maker of better-for-you snacks with annual sales of approximately $45 million. Deep River produces kettle-cooked potato chips and Honchos organic seasoned tortilla chips; all products have non-GMO ingredients, are gluten-free, cooked in sunflower oil, and Kosher and nut-free. According to Arca, Deep River Snacks rounds out Arca’s portfolio to capture both the conventional and better-for-you segments in the snack category while partnering with a company whose mission aligns with Arca’s sustainability and social responsibility strategy.

DuPont partners with APC Microbiome Institute in Ireland

DuPont Nutrition & Health has announced the creation of a Microbiome Venture, which will engage in strategic partnerships with microbiome science leaders to develop solutions for health and wellness. The first major partnership will be with the APC Microbiome Institute in Cork, Ireland. The multi-year arrangement will focus on maternal and infant microbiomes, which play a critical role in infant development and long-term health. DuPont’s Microbiome Venture investment will complement its existing product portfolio, especially probiotics and prebiotics, including human milk oligosaccharides, the company said. The human microbiome is used to describe the array of microbes living in and on the body, also known as the human microbiota. DuPont said the Microbiome Venture would play a key role in its business growth strategy.

McKesson Canada acquires

McKesson Canada (Montreal), a supply chain and health care services company, has acquired (Guelph, Ontario), strengthening the online commerce capabilities of McKesson Canada’s retail assets, including Rexall Drug Store. is a Canadian online destination for health, wellness, natural and baby products. It will operate as a separate business within McKesson Canada while retaining its existing brand and remaining headquartered in Guelph.

Prose announces $5 million Series A for custom-made hair care

Prose (New York, N.Y.), a maker of fresh and custom-made hair care products, announced a $5.2 million Series A round led by Forerunner Ventures with participation from Correlation Ventures. This brings Prose’s total funding to $7 million. Prose says it has sourced 76 natural ingredients and developed a proprietary algorithm that evaluates 85 data points to create custom-made formulas that are all cruelty-free, non-toxic and free of sulfates, parabens, dyes, phthalates and GMOs. The brand was founded by former L’Oréal and Phyto executives “to fix diversion, in which mass-produced hair care systems labeling themselves as professional-grade are being sold everywhere from Amazon to Costco, bypassing professionals.” Consumers begin with a consultation with their stylist, or online with a Prose professional.

Latium offers $26 million for Vitamin World retail chain

Nutritional supplement retailer Vitamin World (Holbrook, N.Y), which filed for bankruptcy protection in September, has received a $26 million cash offer from Latium Enterprises to purchase its remaining 150 stores, Newsday reported. Latium is owned and managed by British businessman Brian Kennedy. Private equity firm Centre Lane Partners acquired Vitamin World from global vitamin maker NBTY Inc. for about $25 million in 2016. Nature’s Bounty Co. (formerly NBTY) sold its Holland & Barrett retail chain in the UK to L1 Retail for about £1.8 billion earlier this year.

Target to acquire Shipt for same-day delivery

Target Corp. (Minneapolis, Minn.) has agreed to acquire Shipt Inc. (Birmingham, Ala.), an online grocery delivery service, for $550 million in cash. Target said it would leverage its own network of stores and Shipt’s proprietary technology platform and community of shoppers to offer same-day delivery across the country. Analysts see the move as a response to Amazon’s same-day delivery strategy. Shipt will be a wholly owned Target subsidiary and will run independently. Shipt launched in 2014 and uses independent people to shop for groceries and deliver to members, scheduled via the Shipt Shopper app.

Encore Consumer Capital sells MyChelle Dermaceuticals

Encore Consumer Capital has sold MyChelle Natural Skin Care LLC (Louisville, Colo.) to French Transit LLC (Burlingame, Calif.), the marketer and distributor of Crystal natural deodorant. MyChelle products are sold through natural retail and direct-to-consumer channels. French Transit acquires and develops personal care brands.  MyChelle is Encore’s second exit in the beauty industry following the 2014 sale of Tarte Inc.

Unilever to acquire Schmidt’s Naturals personal care

Unilever (Englewood Cliffs, N.J.) announced an agreement to acquire Schmidt’s Naturals (Portland, Ore.), a personal care company specializing in deodorants, bar soap and toothpaste. “The brand’s focus on transparency and mission to make natural products accessible to everyone aligns closely with Unilever values and represents an exciting category expansion for our family of brands,” said Kees Kruythoff, president, Unilever North America. Unilever’s U.S. deodorant brands include Degree, Axe and Dove. Earlier in December Unilever announced it would acquire Sundial Brands (Amityville, N.Y.), a natural hair care and skin care manufacturer with revenues of around $240 million.

Nextworld Evergreen acquires Alter Eco

NextWorld Evergreen has acquired Alter Eco Americas PBC (San Francisco, Calif.), a healthy indulgence snack food brand. Alter Eco is a mission-driven brand that offers premium organic snacks like clusters, chocolate bars and truffles in the United States, Canada, Australia and New Zealand. Alter Eco senior managers will remain with the company. Previous growth financing came from impact investors, including Renewal Funds and Social Venture Network founder Josh Mailman.

Fuzzy Pet Health closes $4.5 million seed round

Fuzzy Pet Health (San Francisco), a subscription-based pet healthcare company, has closed a $4.5 million seed round co-led by Eniac Ventures and Crosscut Ventures. Subscribers to Fuzzy Pet can chat with vets in real-time, request diagnoses and prescriptions, and get recommendations for products and services based on their pet’s lifestyle. The recently added Fuzzy Plus program focuses on curative care and diagnostic services like in-home cold laser therapy for pain and inflammation and blood panels. Founded in 2015, Fuzzy Pet plans to expand to additional cities in 2018.

Riverside Company sells Outward Hound interactive pet toys

The Riverside Company has sold Kyjen—dba Outward Hound (Centennial, Colo.)—to J.W. Childs. Outward Hound designs and distributes interactive pet toys that promote mental and physical wellbeing of pets, in addition to pet accessories such as travel gear and life jackets. Founder Kyle Hansen will retain a significant stake in the business. Outward Hound was a Riverside portfolio company for four years, during which time add-on acquisitions were made including Petstages, Dublin Dog, Bionic Pet Products and Zoo Active. Four executives from J.W. Childs will join Hansen on the Outward Hound board of directors.

Acre Ventures and Techstars lead $13 million Series A for Pilotworks

Pilotworks (formerly Foodworks), a community of food incubators, mentors, and entrepreneurs, has announced a $13 million round of Series A financing led by Techstars Ventures and Acre Venture Partners, a venture capital fund of Campbell Soup. The investment will help build Pilotworks’ education and mentorship program and open more kitchen spaces for startups. The kitchens provide access to cooking infrastructure and equipment, lowering the barrier to entry for young culinary entrepreneurs.

Transformative farmer-to-farmer network announces $110 million Series D

Farmers Business Network (FBN, San Carlos, Calif.), a digital farmer-to-farmer network, announced a $110 million Series D funding round led by funds and accounts advised by T. Rowe Price Associates and Temasek. This investment brings the company’s total equity funding to nearly $200 million and will be used to expand digital crop marketing, direct purchasing, and farm analytics services, in addition to expansion into Canada. “By connecting farmers digitally, farmers are empowered through network-enabled agronomic insights, transparent online input purchasing, and a global crop marketing network to drive profitability even in the toughest markets,” said Charles Baron, co-founder and vice president. With price transparency and online purchasing through FBN Direct, farms commonly save tens of thousands on inputs, even as much as $120,000 in a single year, FBN said.

Campbell completes Pacific Foods acquisition

Campbell Soup Company (Camden, N.J.) completed the acquisition of Pacific Foods of Oregon (Tualatin, Ore.) in December for $700 million in cash. Pacific Foods is a leading producer of organic broth and soup and shelf-stable plant-based beverages. Pacific Foods generated approximately $232 million in trailing 12-month net sales as of November 2017. Campbell expects Pacific Foods to contribute approximately $100 million in net sales in fiscal 2018. Pacific Foods will join Campbell’s portfolio of organic foods, which Campbell says is in the top 10 in the industry. Other brands in Campbell’s Americas Simple Meals and Beverages division include Swanson, Prego, Pace and Plum Organics. Campbell will operate Pacific Foods out of Tualatin.

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