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Tillamook Country Smoker on the block

Illustration: Sarah Grillo/Axios

Insignia Capital-backed jerky brand Tillamook Country Smoker is working with Houlihan Lokey to explore strategic alternatives, two sources familiar with the matter tell Axios.

Why it matters: Sponsor-led dealmaking in the consumer middle market has been muted this year, but a transaction for Tillamook could revive the sector.

Details: Tillamook generates around $150 million in sales and is profitable, one source says.

  • Last year the company completed a $75 million dividend recap provided by FocalPoint, a division of B. Riley Securities, per PitchBook and ABF Journal.
  • It's been owned since 2017 by PE firm Insignia Capital Group, which acquired it from third-generation family owners.
  • Tillamook opened its first factory in 1975, backed by the Smith, Gienger and Crossley families, according to the company's website.

Context: Since the jerky brand Krave launched in 2009, better-for-you variations on the meat snack trend have been the rage for the past decade.

Between the lines: Hershey's acquisition of Krave for nearly $220 million in 2015 proved unsuccessful for the candy maker (it sold it back to the founder) — but there have been other transactions that have stuck.

  • Those include General Mills' purchase of Epic Provisions in 2016 and Conagra's buy of Thanasi Foods, maker of Duke's Meat Snacks, in 2017, one of the sources notes.
  • In March, Western Smokehouse was acquired by PE firm AUA Private Equity Partners from Monogram Capital Partners.

What we're watching: Western Smokehouse is the co-packer for meat sticks brand Chomps, which gobbled up an $80 million cash infusion from Stride Consumer Partners last year at a valuation between $200 million and $300 million, per Bloomberg.

  • Chomps is scaling to the size of Tillamook and is likely to be an attractive target for strategic acquirers within the next couple of years, the source notes.
  • Country Archer Provisions, also owned by Monogram, could explore a sale depending on strategic interest.

State of play: The jerky industry is dominated by three large players, including Slim Jim, which is owned by ConAgra, plus family-owned Jack Link's and Oberto.

Houlihan Lokey declined to comment, while Tillamook Country Smoker and Insignia did not respond to a request for comment.

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