Truelink Capital buys Lyons Magnus for $1 billion in food-ingredient deal

Truelink Capital struck a roughly $1 billion deal to buy Lyons Magnus from Paine Schwartz Partners, adding a coffee-syrup maker that has doubled annual sales to more than $1 billion since the private-equity firm bought it eight years ago.

The Los Angeles-based buyout firm said Monday it had acquired Lyons Magnus, a California company tracing its roots to 1852 that produces coffee syrups, smoothie bases, ice cream toppings, nutritional drinks and fruit purees for restaurant chains and coffee shops. The deal value was not disclosed by the firms; the Wall Street Journal earlier reported it at about $1 billion including debt, citing people familiar with the matter.

Paine Schwartz, a private-equity firm focused on sustainable food chain investing, bought Lyons Magnus in 2017. Since then, the company has nearly doubled annual revenue to more than $1 billion through a series of bolt-on acquisitions, including the purchase of some operations from Hormel Foods, and expanded into serving healthcare-sector customers. Truelink, a midmarket buyout firm that raised $2 billion for its latest fund in March, is acquiring the business as part of a broader push into business services and industrials.

The acquisition comes amid a wave of consolidation in the food-ingredients sector. In May, International Flavors & Fragrances agreed to sell its food-ingredients business to CVC Capital Partners in a deal valued at more than $4 billion including debt. The following month, U.S. food-and-beverage ingredients maker Ingredion struck a $3.6 billion deal to buy U.K. rival Tate & Lyle. The string of transactions signals sustained private-equity appetite for specialty food assets, where recurring revenue from branded ingredients and long-term supply contracts with major food-service operators provide predictable cash flows.

This article is for informational purposes only and does not constitute investment advice.