- Private-equity firm Metropoulos & Co has sold its equity stake in Utz Quality Foods, roughly doubling its money 15 months after investing close to $150 million in the salty snack company, according to the Wall Street Journal.
- Metropoulos is not fully divested from Utz. It helped the chip and pretzel maker refinance a portion of its $650 million in debt in December.
- This is the latest success story for Metropoulos, which has a proven track record of investing in underperforming brands and helping them grow. The firm has previously backed Hostess Brands, Pabst Brewing, Ghirardelli Chocolate and Chef Boyardee.
Struggling U.S. food products companies are ripe for investment from private-equity firms such as Metropoulos & Co. As consumer tastes change, some legacy brands with strong, recognizable names have had trouble keeping up. That’s where outside companies and private-firms come into play to help revitalize old brands, often turning an impressive profit in the process.
B&G recently demonstrated this with its acquisition of frozen vegetable company Green Giant. After picking up Green Giant in 2015 from General Mills, B&G added several innovative products — including veggie tots and riced veggies — that have turned the brand into one of the company's most consistent money makers. Green Giant is now slated to debut a lineup of frozen veggie spirals this month.
Some older brands have had difficulty staying relevant with consumers. These brands are often neglected by larger parent companies that are more concerned with bigger growth products. But when a private-equity firm invests in declining brands, many receive the resources they’ve been lacking and seem to spring back to life.
Metropoulos & Co has employed this strategy multiple times with great financial success.
Metropoulos & Co. and Apollo Global Management purchased the Hostess snack cake brands out of liquidation in 2013. In addition to innovating the iconic snack cakes with new flavors and varieties, the investment firms focused on corporate restructuring, a successful warehouse-centered delivery model and an in-store bakery system — all of which helped revive the brand. William Toler, Hostess' president and CEO, said last year it now sells more Twinkies than the old Hostess ever did.
Daren Metropoulos told the Wall Street Journal that the firm focuses on accelerating the growth of brands through product innovation and brand marketing. Expect more private-equity firms like Metropoulos & Co to start taking a bigger bite of the U.S. food product market as they look for unloved and forgotten brands.