Mi-Del

Hammond, Kennedy, Whitney & Co. Inc., an Indianapolis-based private equity firm, has acquired natural food provider Panos Brands LLC from High Road Capital Partners.

Panos, headquartered in Rochelle Park, New Jersey, focuses on “better for you” foods sold in specialty, natural and organic grocery stores. Brands include Ka-Me Asian foods, Andrew & Everett hormone-free cheeses, Mi-Del gluten-free and peanut-free cookies and pie crusts, Sesmark rice- and wheat-based crackers, Amore cooking pastes and filled pastas, and Chatfield’s allergen-friendly baking products. Terms of the transaction, which closed on Jan. 29, were not disclosed. Panos CEO Steven Grossman is staying on as CEO.

John Carsello, a Hammond, Kennedy, Whitney partner, says that Panos met the key criteria for the firm’s investment, including its position in the attractive health and wellness food niche, its growth track record and its executive team’s creation of a results-oriented environment. Hammond, Kennedy, Whitney has sponsored 51 platform transactions of lower middle-market companies North America and 56 add-on acquisitions since 1982.

New York-based High Road Capital invests in companies in the lower middle market, acquiring companies with revenues of $10 million to $100 million and Ebitda of $3 million to $10 million. Formed in 2007, the firm manages more than $470 million of committed capital. The Panos deal is the PE firm’s fifth exit for its debut High Road Capital Partners Fund I LP. Including the five exits, the firm has completed 38 transactions, with 14 platform investments and 19 add-on acquisitions. High Road acquired Panos five years ago as a spinoff from a European company, and the company’s revenues grew more than 50 percent and Ebitda grew more 250 percent, says Bob Fitzsimmons, High Road managing partner.

Panos was represented by Harris Williams & Co. in this transaction, and Jones Day provided legal counsel to the company.  High Road Partner Bill Connell, Principal Dan Gaspar and Partner Jerry Anderson led the High Road investment team.

Middle-market M&A activity has reflected consumers’ healthy foods binge for several years. Most recently, strategic buyers have been active in healthy snacks and the food sector. For example, the Hain Celestial Group (Nasdaq: HAIN) is buying Orchard House Foods and General Mills (NYSE: GIS) purchased Epic Provisions.

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