How can you accurately assess the value of a produce company generations in the making? Are there opportunities in private equity that could take your business to the next level? How can you forge mutually-beneficial partnerships that will grow the scope of your operation? These are some of the questions that will be addressed in the 2018 Viva Fresh Produce Expo’s educational session on mergers and acquisitions and the business of private equity.
This Spring, when produce professionals from throughout the United States and Mexico descend on San Antonio, Texas, to take part in the fourth annual Viva Fresh Expo, held April 5-7, participants will be able to take part in this panel discussion, held April 6th at 8:45 a.m., to learn more about the role of private equity in produce, and gain insights from those with firsthand knowledge of this important aspect of growing a business.
Meet the Panelists
Joel Montminy is the founder and CEO of CREO | Montminy & Co., a Los Angeles-based boutique investment bank. The firm has advised over 100 companies in the food industry—including nearly two dozen in produce—going through some form of corporate finance transaction, often with private equity partners.
Jay Pack is the former Owner and CEO of Standard Fruit & Vegetable Co., Inc., a $400 million integrated repacker, logistics, and value-added produce company, with distribution in thirty-five states. The company was sold to Del Monte Fresh, a NYSE company, in January 2003. Subsequent to the sale of the company, Jay and his wife Ruthie created the Pack Family Foundation, with a focus on education and the arts. He is an investor in—and currently serves on the Board of Directors for—Mission Produce, Country Fresh, and Coastal Sunbelt.
Ferrell Daste has more than 30 years of experience affecting transactions and interacting with the global institutional investor community. As the President of Agriglobe Capital LLC, Ferrell provides marketing consulting services to the alternative asset community inclusive of food and agricultural companies. Throughout his career, Ferrell has held senior roles in the industry—including positions with Olam International, Deutsche Bank, and Goldman Sachs.
Moderator, Robert Lambert is the President and CEO of Vantage Point Media, a business encompassing the produce trade news publications AndNowUKnow and The Snack Magazine, as well as the deli news publication Deli Market News. Robert’s company specializes in digital and print media solutions for the fresh produce industry, while creating artistic, innovative marketing and editorial content for buyers and suppliers in the food business.
What are the potential benefits of private equity investment, and how can produce companies best ascertain their options in this financial paradigm?
As an investment banker specializing in the food industry, with a number of sizeable and successful produce industry transactions to his credit—including the strategic partnership between Total Produce and Progressive Produce—Panelist Joel Montminy, Founder, President, and CEO of CREO | Montminy & Co., has answers.
“Private equity has long been attracted to the food industry—and produce in particular due to its attractive underlying demand and revenue predictability,” Joel explains to me. “At its simplest form, a private equity partner allows produce industry entrepreneurs to obtain the capital needed for their businesses to continue to evolve and prosper, and typically reconfigures equity ownership by cashing out current shareholders. These equity investments are usually paired with forms of debt: senior, subordinated, and mezzanine capital. They also require post-closing continuing commitment by management, allowing the prior owners/managers to participate in future growth and upside when the business is sold down the line. A good private equity partner also brings board expertise and corporate hygiene to help enhance overall performance. So the most obvious benefits to the operator are capital to grow, partial liquidity and ongoing stake, leverage to drive equity returns in the next liquidity event, and experience in professionalizing companies.”
Despite an attractive upside, though, there are challenges associated with institutional investment, and enlisting the advisory services of an investment banker like CREO | Montminy & Co. or Agriglobe Capital is a first and indispensable step in approaching private equity investment.
“Agriglobe Capital advises small and middle-market companies—often family businesses in the food and agriculture space—on finding a strategic capital partner or selling their business,” Panelist Ferrell Daste, President of Agriglobe Capital, tells me, explaining that for many produce companies, though the idea of private equity investment is appealing, the demands of the produce business are too demanding for companies to properly investigate their options. This is where Ferrell and Agriglobe Capital can intercede, working with agricultural operations to assess their options and enter into the most beneficial possible transactions and partnerships.
“Most companies and grower families are traditionally relationship-level businesses that are not fully prepared to present themselves to an institutional investor,” notes Ferrell. “A common theme I find is that most of the smaller companies and families are so busy running their business day to day that they are unable to clearly define their goals and objectives. We help companies try to identify their key goals and then discreetly find a partner or buyer who is the right fit in terms of size, culture, and timing.”
The third panelist for Viva Fresh’s private equity educational session is a familiar name in the produce world. As both an investor and the former Owner and CEO of Standard Fruit & Vegetable Co., Jay Pack has been involved in both sides of the private equity equation and brings indispensable advice from the perspective of a produce industry veteran.
“Having been an owner, operator, a direct investor, and a board member for a number of companies involved in private equity, I think I have a solid understanding of the private equity world from a produce perspective,” adds Jay. “After selling Standard in 2003, I became involved with several private equity firms and ultimately chose to work with a number of private equity firms as a free agent, while simultaneously being involved in various projects as a direct investor. There are many factors to take into account when considering a private equity investment—growth rate, interest rates, strategic positioning and synergies, whether a company will require significant CAPEX or changes in management—and from an ag company’s perspective, finding the right cultural fight with a strategic partnership can be as important as capital considerations. There are a lot of pieces to the puzzle.”
The private equity panel will be moderated by our own President and CEO Robert Lambert—who brings his own share of experience in both the produce and financial industries.
The 2018 Viva Fresh Produce Expo takes place April 5-7, at the JW Marriott Hill Country Resort & Spa in San Antonio, Texas. Educational sessions will take place April 6. Book your registration and accommodations today, and learn more about how you fit into the potentially lucrative puzzle of private equity investment.