The Detroit-based lower mid-market firm plans to combine Aquamar and LM Foods into a single platform, providing imitation crab meat to North American food service, food manufacturing and retail channels.
Lower mid-market private equity firm Huron Capital announced Thursday it has created a new seafood platform through equity investments of an undisclosed size into two seafood companies.
The companies, Aquamar and LM Foods, will be combined to create Aquamar Holdings, which will focus on the provision of surimi, a paste made from fish.
Aquamar is based in Rancho Cucamonga, California and sells frozen, refrigerated and shredded surimi products to restaurant and foodservice customers under a namesake brand. Carteret, New Jersey-based LM provides private label clients with premium, select and value grades of surimi under the Classic Bay brand. Both companies operate their own manufacturing facilities.
Huron principal Matthew Hare told Agri Investor that while the firm has made previous investments in food, the creation of Aquamar Holdings marks their first seafood transaction. Hare said that the surimi provided by the platform is derived primarily from wild-caught Alaskan pollack, which is combined with starch, water and seasonings designed to mimic the taste of crab.
“That doesn’t sound on-trend. It doesn’t follow the all-natural, organic or trends you see happening with retail food, but when you look at the channels, a lot of it ends up in the foodservice channel and is going into the sushi market,” he said, mentioning California rolls and the poké restaurant trend as specific sources of surimi demand. “It’s not a double-digit grower, but it’s a steady grower, and we think there are some unique angels that these products have.”
Hare, who declined to identify the fund from which Huron’s Aquamar investment came, said the firm plans to focus on equipping both company’s production plants to handle anticipated demand growth and investing in a sales and marketing strategy. Huron plans to keep the each company’s brands distinct, Hare said.
Detroit-based Huron was founded in 1999 and has raised $1.7 billion into six distinct funds, most recently surpassing a $500 million target to close its Huron Fund V on $550 million in February. Focused on companies with annual revenues of up to $200 million in the business services, consumer products and specialty industrials sectors, the firm employs equity recapitalizations, family succession, corporate carve-out and other approaches in its investments.
Its current portfolio includes premium coffee manufacturer and distributor Ronnoco Coffee, and late last year, Huron led an ownership group that sold pasta and specialty sauce provider Victoria Fine Foods to B&G Foods for $70 million.