VMG Takes Stake in Pirate’s Booty Maker

The consumer-oriented PE firm acquired an undisclosed stake in Robert’s American Gourmet Foods, representing the latest investor to target the organics space.

By KEN MacFADYEN

November 13, 2008

Pretty soon private equity firms may control the entire organic aisle. Consumer-focused VMG Partners made an investment in Robert’s American Gourmet Foods, teaming up with the company’s founder Robert Ehrlich in the deal. Terms of the transaction were not disclosed.

LBO shops have gravitated to the natural foods space in recent years. Solera Capital, for instance, owns Home Grown Naturals, which is best known for its Annie’s brands of macaroni and cheese and snacks and the Annie’s Naturals brands of salad dressings and condiments. UK firm Lion Capital is also a player in the space, acquiring potato chip maker Kettle Foods in 2006. VMG’s investment, meanwhile, will give the firm a stake in the maker of the Pirate’s Booty, Smart Puff’s and Tings snack brands.

VMG managing director Kara Cissell-Roell alluded to the growing demand for natural foods in a statement, citing that the organic snacks category, a $2 billion segment of the overall food space, has grown by over 15% a year. The strength of the segment “is fueled by the American consumers’ demands for healthier, unique foods with simple, wholesome ingredients and we expect that trend to continue,” she said.

VMG was founded in 2005 by Shansby Group veterans Scott Elaine Case, Michael Mauzé and Robert Schult, and ex-talent agency pro David Baram, who had served as president and CEO of The Firm. VMG, which invests out of a $325 million debut fund, includes tea maker Mighty Leaf, makeup brand Colorescience, and bag manufacturer Timbuk2 in its portfolio. They firm has also invested in the organic space before, with an investment in all-natural pet treats maker Waggin’ Train.