Paine Schwartz exits Meadow Foods amid fundraise

After completing two acquisitions since September 2016, the dairy supplier has been acquired by Exponent, a UK mid-market firm.

Paine Schwartz Partners has sold its stake in Meadow Foods, an independent UK dairy and value-added ingredient provider, to Exponent Private Equity.

The company’s founding Chandler family will remain a stakeholder in the business and capital from Exponent’s investment will be dedicated to continuing growth through both organic expansion and acquisitions. Financial terms were not disclosed.

Meadow Foods draws from a network of 650 UK dairy producers to supply more than 650 million liters of milk and 100,000 tons of dairy ingredients annually to customers in the manufacturing and foodservice industries under its Green Valley Dairy brand. Founded in 1992, the company runs three factories and its offerings include soft cheese, cultured products as well as a variety of milks and butters and butter oils.

“Meadow Foods has matured as a business significantly in recent years and we believe the business is extremely well-placed for continued growth,” said Exponent Private Equity partner Oliver Bower.

Paine made its initial investment in Meadow Foods, a reported 35 percent stake, in September 2016, using capital from its $893 million Fund IV. According to a presentation for the successor to that vehicle, Paine’s Food Chain Fund V, for which the firm is currently seeking $1.2 billion, the initial investment was valued at $76 million.

In August 2017, Meadow Foods acquired Fayreville Liquids,  a dairy products supplier based in the UK. A further addition came in February, when the Chester-headquartered company bought Roil Foods, an edible oils producer headquartered in the UK.

At the time of the Roil Foods investment, Meadow Foods chief operating officer Jack Hancock told Agri Investor that the deal was part of the company’s efforts to supply food manufacturers  – especially chocolatiers – with customized dairy ingredients.

Founded in 2004, Exponent Private Equity is a mid-market private equity firm headquartered in London. Capital for the investment reportedly came from its Fund III, which exceeded an initial target of £800 million ($1.04 billion; €899.3 million) before closing on £1 billion in April 2015.

According to sister publication Private Equity International, the firm’s plans to dramatically increase the size of that vehicle’s successor fund were curtailed by investor concerns related to Brexit.

Exponent did not return messages seeking further detail by press time.