Tillridge backs savory ingredient producer

Tillridge Global Agribusiness Partners has completed an investment of an undisclosed size into Pacific Farms, a company that provides minimally processed vegetable ingredients to the food processing industry.

Seattle-headquartered Cascadia Capital announced in mid-December that it acted as financial adviser on the transaction to Pacific Farms, which is headquartered in Reno, Nevada, and maintains offices in California, Washington, Indiana and China.

Established in 1983, Pacific Farms provides consumer packaged goods and branded product manufacturing customers with products including garlic, onions, shelf-stable savory purees and sauces, and dehydrated vegetables.

“These areas often are agri-driven, some more than others,” Cascadia managing director George Sent told Agri Investor. “If you understand the underlying commodities and swings of agribusiness, it’s really helpful in investing in ingredients, whether fruits or vegetables.”

Sent added that Tillridge’s majority investment is designed to build on Pacific Farms’ 2018 acquisition of Ful-Flav-R Food Products, a producer of shelf-stable vegetable purees.

Investor interest in savory ingredients, he said, is supported in part by the fact that the market is still relatively fragmented, with approximately 10 family-owned companies with annual revenues above $30 million each focused on specific product categories.

“Hot sauces are really interesting to consumers today. Cholula sold last year to McCormick for a very high multiple,” said Sent. “People are continuing to look for these specialty condiments and sauces, so if you are a provider to them, there is some value that inures to you as well.”

He explained that family-owned Pacific Farms played a key role over recent decades in establishing trade in garlic imported from China, which accounts for the majority of US supply. Such transactions saw little impact from recent US/China trade tensions, according to Sent, who added that Pacific Farms had hired Cascadia after receiving inbound investor interest.

“There were many private equity groups out there that were thinking through this,” said Sent. “They had to be either educated already or get comfortable with the fact that it is coming from China. For those that either got it or could learn, they were all over this. They realized it was a really defensible infrastructure that had been set up.”

Dallas-headquartered Tillridge, which did not reply to messages seeking further detail, was established in 2016 as a spinout from Irving, Texas-headquartered NGP Capital.

It launched its Tillridge Global Agribusiness Partners II fund in late 2016, targeting $750 million for a strategy aiming to provide a gross IRR of 25 percent over a 10-year fund life through midstream agribusiness investments. Tillridge raised at least $375.2 million for the vehicle from a minimum of 26 LPs, including the Maine Public Employees Retirement System, the Oregon Investment Council and the Houston Municipal Employees Pension System.

The firm managed $335.4 million as of December 2020, according to a March regulatory filing. Its portfolio has included Canadian pulse and specialty grain producer ILTA Grain; Milwaukee, Wisconsin-headquartered Proximity Malt; and fresh produce supplier Growers Express, among others.