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Golden Gate scales back consumer-related holdings

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Illustration: Maura Losch/Axios

Private equity firms such as Golden Gate are liquidating some of their consumer-facing holdings to refocus their portfolios, industry dealmakers tell Axios.

Why it matters: The firms are under pressure to sell now that conditions are good enough to transact in.

Zoom in: Golden Gate is scaling back its consumer-facing portfolio, namely Bob Evans. It also owns apparel retailer PacSun.

  • Among its other holdings, it counts Modere, a manufacturer and distributor of personal care and nutrition products, Mavis Discount Tire, Tidal Wave Auto Spa and The Learning Experience, a chain of early education academies.

Context: Over the last decade, Golden Gate has seen key leaders depart, like former managing director Stefan Kaluzny who left in 2011 to form Sycamore Partners.

  • Joshua Olshansky, who oversaw investment in retail, stepped back into a senior adviser role in 2021 from managing director.
  • Josh Cohen, a former managing director at Golden Gate involved in the acquisition of Bob Evans, left in 2022, per PE Hub.

The other side: "Golden Gate Capital continues to be highly engaged in investing in consumer businesses, with seven current consumer portfolio companies," a spokesperson for the firm tells Axios.

  • "Golden Gate Capital's most recent investment in Virginia Green, a consumer-focused lawn care company, was announced in January of 2024. Mike Montgomery and Neale Attenborough, both Managing Directors at Golden Gate Capital, have been with the firm for 18-plus years and continue to lead an active consumer team."

Catch up quick: Carlyle Group is also in the process of selling its consumer-related investments, which include Golden Goose, Arctic Glacier and Beautycounter, among others.

Angelo Gordon, now owned by TPG, has been focused on its credit and real estate businesses, sources say.

  • The firm last month sold Benihana's parent company, Safflower Holdings Corp., which represented the last material equity position in a legacy PE fund, per a source.

Caveat: TPG Angelo Gordon still holds equity in cosmetics company Revlon as a result of a bankruptcy restructuring.

Between the lines: Safflower took three trips to the auction block before it was sold, sources say.

  • The multiple ended up being around 5x EBITDA because the restaurant operator needed investment and Angelo Gordon wanted to move on even though dealmaking conditions weren't ideal, they say.

PE firm Butterfly Equity, which has been trying to raise another fund, is also marketing several consumer assets.

  • Supplement brand Mary Ruth Organics was working with investment bank Houlihan Lokey on a sale process last fall, but offers fell short of expectations.
  • It put Chosen Foods on the block in March after hiring Morgan Stanley and Bank of America to run a process, per Reuters.
  • In addition, it could look to put Bolthouse Farms back on the market this year after a process to sell was shelved due to valuation discord, sources have said.

Butterfly did not immediately respond to a request for comment. TPG Angelo Gordon declined to comment.

Editor's note: The headline, URL and story have been updated to clarify Golden Gate is offloading some of its consumer-facing businesses, and to add a statement from the firm.

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