Mid-market private equity firm Palladium Equity Partners announced Wednesday that it has made an investment of an undisclosed size in nut and trail mix provider Kar Nut Products Company (Kar’s).
A market source told Agri Investor that Palladium’s investment leaves it the majority owner of Kar’s, with existing owners retaining a significant minority stake.
Palladium’s investment in Kar’s came from the firm’s Palladium Equity Partners IV Fund, which exceeded its hard-cap of $800 million to close on $1.14 billion in 2014.
According to the statement, Palladium’s plans for Kar’s will focus on geographic and channel expansion, new products and potential snack food-related acquisitions.
“We believe that Kar’s has established itself as the US trail mix market leader, having grown two well-known brands that offer a range of value-based and premium products to meet the demands of consumers for convenient and nutritious foods,” Palladium principal Yue Bonnet said in the statement.
Founded in 1933 in Detroit, Kar’s sells value-orientated trail mixes and nuts under brands including Kar’s, Second Nature and Sweet N’ Salty Mix. Kar’s products are manufactured in a facility in Madison Heights, Michigan and distributed nationwide through grocery chains, club stores and distributors.
Independent agricultural analyst Hugues Rinfet told Agri Investor that US nut consumption has grown in recent years and retail prices have remained relatively high. Formerly director of research at MetLife, Rinfret said that while nut export demand has wavered a bit over the past year, domestic consumption continues to show strong growth.
“The consumer likes them,” he said. “Its convenient and it’s a alternative source of protein, non-animal, which seems to be better-perceived as a source of protein. These are all pluses for the sector.”
Palladium is a private equity firm founded in 1997 with approximately $2 billion in assets under management. Based in New York, the firm invests across the food and consumer, business and financial services, industrial and other sectors, often with a specific focus on investments positioned to benefit from the US’s growing Hispanic population. The firm’s other food-related investments include premium nut and fruit snacks provider Sahale Snacks, Hispanic cheese manufacturer and distributor Castro Cheese and Wise, which sells salty snacks.