Target Company Overview

Benford Capital Partners ("Benford Capital" or "BCP") is pleased to announce the sale of Pasture Brands (the "Company"), the parent entity established to acquire Farmers Hen House, a prominent provider of both branded and private-label specialty eggs, along with Pillars Yogurt, a leading brand known for drinkable and plant-based yogurts. The transaction successfully closed on January 9, 2025.

Farmers Hen House, founded in 1997 and based in Kalona, IA, is dedicated to sourcing, processing, and packaging specialty eggs, which include organic, free-range, and pasture-raised options. The Company operates through a diverse customer base spanning natural, conventional grocery, and club channels and collaborates with over 90 local farmers to offer high-quality products. In 2016, Pillars Yogurt was launched as a better-for-you, clean-label option, quickly gaining recognition for its taste, nutritional benefits, and quality.

Industry Overview

In the United States, the specialty egg and yogurt sectors are experiencing significant growth, driven by a rising consumer demand for healthy and sustainable food options. The market for specialty eggs has expanded rapidly as health-conscious consumers seek products that align with their dietary preferences, such as organic and free-range options. This trend is further bolstered by increased awareness of animal welfare and environmental sustainability, leading many producers to adapt their practices accordingly.

The yogurt industry, particularly the alternative and clean-label segments, has similarly gained traction among consumers who prioritize health and wellness. The rise of plant-based diets has led to a surge in interest in dairy alternatives, with products like drinkable yogurts becoming increasingly popular. This resonates well with younger demographics, who are often more willing to try new products that appeal to their lifestyle choices.

As these industries evolve, competition is also intensifying. Companies are focusing on innovation, product differentiation, and effective marketing strategies to capture market share. Collaborations, mergers, and acquisitions are becoming more common as companies aim to leverage synergies and enhance their offerings in response to consumer demands.

Overall, the future outlook for the specialty egg and yogurt sectors appears positive, as companies develop new products and improve supply chains to meet the growing consumer interest in health, nutrition, and sustainability.

Rationale Behind the Deal

The rationale for the sale of Pasture Brands hinges on its significant growth trajectory and Benford Capital's commitment to enhancing the Company's strategic direction. During the three-year investment period, BCP collaborated closely with CEO Ryan Miller, focusing on expanding the executive team and prioritizing branded revenue growth. These efforts included the successful acquisition of a complementary brand in the dairy space, further solidifying Pasture Brands' market position.

The collaboration facilitated the expansion of the Company’s supplier network, enabling better sourcing and increased product offerings tailored to customer demands. With the strengthened management and operational improvements, Pasture Brands is now well-equipped for future success beyond this transaction.

Investor Information

Founded in 2004, Benford Capital is a private equity firm based in Chicago with a strategic focus on acquiring and enhancing lower middle-market companies across various sectors, including consumer products, food, and agricultural services. With a proven track record of acquiring over 55 companies, Benford Capital currently manages approximately $350 million of total capital and operates with its $200 million Fund II.

BCP emphasizes partnership with founders and management teams to drive growth and improve operational efficiencies within its portfolio companies. The firm's deep industry expertise and hands-on approach have established it as a trusted partner in the market.

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This transaction represents a strategic move for both Pasture Brands and Benford Capital, and it is seen as a sound investment decision. The sectors that Pasture Brands operates within are poised for growth, driven by increasing consumer interest in health and sustainability, which further enhances the attractiveness of the investment.

Benford Capital's engagement in reshaping the management team and fostering a culture of innovation has positioned Pasture Brands well for future expansion. This proactive strategy, combined with their comprehensive understanding of market dynamics, has contributed to the Company's robust performance metrics during the investment period.

Additionally, the successful integration of a complementary brand underlines the potential for creating greater value through diversification of products and operational synergies. By building on this foundation, Pasture Brands is well-positioned for further success, making this investment particularly appealing in the long term.

In conclusion, the partnership between Pasture Brands and Benford Capital exemplifies effective collaboration in the food and consumer goods sectors, creating a pathway for sustainable growth and providing strategic advantages in a competitive marketplace.

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