Edgewater Funds Gets Drink Concentrate Maker Beverage House
Cartersville, Ga.–Chicago buyout shop Edgewater Funds has gulped down Beverage House Inc., a company that mixes and packages concentrates of liquid tea, coffee, health drinks and other beverages, for an undisclosed amount.
Edgewater Funds is buying the Cartersville, Ga.-based company from a broad group of private shareholders that was looking for an exit, according to Mark Loeffler, a principal at VRA Partners LLC, the Atlanta investment bank that advised the sellers. Members of management, however, are retaining a stake and continuing with the company.
Beverage House formulates drink concentrates for its clients, which include foodservice companies and retailers, and packages them in boxes or plastic bags before being shipped out. No details about its finances were disclosed.
Edgewater was attracted to the company largely due to its activity in teas and other healthy beverages, which are seeing better growth as more Americans choose alternatives to soda and other sugary drinks. As a result, Beverage House has experienced sales growth of about 40% on average over the last four years, according to Dave Tolmie, a partner at Edgewater Funds.
The company has also carved out a nice niche in the tea, coffee and herbal beverage space, a feature that places it on a short list of concentrate manufacturers that companies go to when they need a mix made.
“We also like how much its customers value the capabilities that the company has to develop a superior product,” Tolmie said. “They are a leader in what they do.”
Edgewater Funds is viewing the company as a platform for acquisitions of other makers of “value-added” beverage ingredients, Tolmie said. The firm also plans on making investments to upgrade the company’s manufacturing facility.
Beverage House generated significant interest from both strategic and financial buyers, largely due to a leading position in the space, Loeffler said. In addition, a diverse customer base protects Beverage House from a downside.
Edgewater Funds is investing out of its Edgewater Growth Capital Partners II LP, a $470 million partnership raised last year.