TSG Consumer Partners, a private equity firm known for investing and reselling holdings in a number of food and beverage brands, announced the completion of a new $1.3 billion fund. In the past, TSG has acquired and sold stakes in Vitaminwater and Voss Water and, most recently, purchased 90 percent of Stumptown Coffee Roasters, the makers of Stumptown Cold Brew, a ready-to-drink iced coffee.
In 2003, TSG purchased a 30 percent stake in Glaceau, the makers of Vitaminwater, and encouraged a focus on building a national DSD network and expanding the profile of the brand through vast guerrilla marketing and consumer trial campaigns. The firm eventually sold its holdings in Vitaminwater to the Tata Group for $677 million in 2006, reportedly reaping a profit of more than 12 times its initial investment.
TSG made its major investment in Portland, Ore.-based Stumptown Coffee Roasters in June and, apparently, the private equity firm is looking to expand its holdings in the specialty coffee business. Representatives from TSG have also met with a number of other high-end boutique coffee companies, including Blue Bottle Coffee, Counter Culture Coffee and Joe, according to the New York Times.
The Times also reported that in June Todd Carmichael, the founder of La Colombe Torrefaction in Philadelphia, said that he met with TSG officials who told him that the firm wanted to eventually sell its coffee holdings to a beverage conglomerate such as Nestlé, Coca-Cola or Starbucks.
Here is the press release announcing the creation of TSG’s newest fund:
TSG CONSUMER PARTNERS CLOSES TSG6 AT $1.3 BILLION
SAN FRANCISCO, CA, November 30, 2011 – TSG Consumer Partners LLC (“TSG”), a leading private equity investor specializing in branded consumer companies, has successfully completed an offering of $1.3 billion in Limited Partnership Interests in its sixth and newest fund, TSG6 L.P., it was announced today by Charles “Chuck” Esserman, Managing Director and CEO.
“We were humbled by the extraordinary interest we received from investors for TSG6,” said Mr. Esserman. “Investors valued the consistency of our returns during the last 25 years for our five prior funds and the strategic and operational depth of our team.”
“Interest in the fund exceeded our fund-raising target by over $1 billion,” said Jamie O’Hara, Managing Director. “We had to say no to many prospective partners.”
TSG’s Managing Directors include John M. Kenney, Pierre LeComte, M. Hadley Mullin, and Alexander S. Panos as well as Mr. Esserman and Mr. O’Hara.
TSG pioneered the use of private equity in high-growth, middle market branded consumer companies. It was among the first significant private equity funds to focus on investing in natural and organic food companies, functional food and beverage categories, and orphan brands in the personal care and household sectors. Its in-depth understanding and experience within the consumer products industry enables TSG to build highly effective partnerships with founders and management teams.
About TSG Consumer Partners LLC
Founded in 1987, TSG is one of the leading investment firms in the U.S. focused exclusively on the consumer sector. TSG has been an active investor in the food, beverage, personal care and household products sectors. Representative past and present partner companies include Famous Amos, Terra Chips, Arrowhead Mills, MET-Rx Nutrition, Mauna Loa, Glaceau vitaminwater, Smart Balance Foods, PureOlogy, Smashbox Cosmetics, e.l.f. Cosmetics, Perricone MD, CytoSport (Muscle Milk) and Yard House among others.