Graham Partners acquires Mercer Foods

A freeze-dried foods and packaging provider has been sold by two private equity firms to a third that hopes to make it a larger presence in the healthy snack food sector.

Frontenac Company announced on 10 November that, along with co-owners Lake Pacific Partners, it has sold Mercer Foods to Graham Partners for an undisclosed sum.

Mercer Foods provides natural and organic freeze-dried fruits, vegetables and other food ingredients offered in internally-designed proprietary packaging. Founded in 1980, the Modesto, California-based company sources food and crops from both local and international suppliers and maintains USDA Certified Organic and Safe Quality Food Level 3 certifications.

“Our investment thesis for Mercer was that freeze-drying technology is uniquely positioned to deliver clean label products to a consumer base increasingly focused on healthy, natural ingredients and snacks,” said Frontenac principal Betsy Williamson in a statement.

In its statement, Chicago-based Frontenac said that since investing in Mercer’s recapitilisation in 2011 it had expanded the leadership team and production capacity and helped lead to a doubling in the company’s revenue.

In September, Mercer introduced two branded product lines: Aqua Fruit, a fruit-infused water, and Truth in Snacks, offering non-GMO, gluten-free snacks made from fruits and vegetables.

“A lot more snacking is happening throughout the day than ever before, over the past 10 to 15 years. Consumers are looking for a healthier way to snack,” said Andrew Snyder, a managing principal at Graham Partners who oversees the investment in Mercer.

Snyder told Agri Investor that the purchase reflects the growing consumer preference for “clean label” fruits and vegetables without sugar or additives and that Graham Partners intends to grow Mercer through acquisitions in the sector.

“There continues to be strong interest in the M&A market for food ingredient and better-for-you snack food businesses,” said Brant Cash, a director at Harris Williams & Co., which advised Mercer on the sale.

Graham Partners is a private investment firm based in Philadelphia that focuses on companies in advanced manufacturing technologies and innovative product development. Typically working with companies with between $5 million and $50 million in EBITDA, the firm has raised $2.1 billion in committed capital since its 1988 founding.