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Post Bolthouse split, Generous Brands aims to acquire

Bottles of Bolthouse Farms juice beverages sit on a grocery store shelf.

Photo: Jeffrey Greenberg/Universal Images Group via Getty Images

Following Bolthouse Farms' split into two companies, the CPG business Generous Brands plans to make bolt-on acquisitions, its chairman, Jeffrey Dunn, tells Axios.

Why it matters: On the consumer side, there is a roll-up opportunity with several beverage companies likely to come to market over the next two years.

Zoom in: Ideally, Generous would like to add another two or three brands to its portfolio, Dunn says.

  • With the purchase of Evolution from Starbucks, the company proved it could quickly integrate $100 million-ish brands and that bolt-ons would be immediately accretive, he says.
  • There are several brands not owned by strategics that could be for sale and there have been discussions, Dunn points out.
  • Axios previously reported that Bolthouse was in talks with Suja Life, for example, but he declined to comment on specific situations.

Catch up quick: This week, Butterfly announced it was splitting the company's carrot farming business Bolthouse Fresh Foods from its CPG business Generous Brands.

  • It was the PE firm's thesis when it bought it from Campbell Soup Company in 2019 for $510 million in cash, recognizing each would have different buyers, Dunn says.
  • "That was the big value unlock," he adds.

Yes, but: First the company, which was declining double-digits when Butterfly purchased it, needed to be fixed and grow again, Dunn says.

  • Bolthouse and Generous each have about $500 million in revenue with the the overall business growing 30% since it was acquired from Campbell, Dunn says.
  • Both companies were refinanced with bank debt because it was cheaper and more flexible, Butterfly co-CEO Adam Waglay says.

Further out exit opportunities for both businesses will present themselves, Waglay says.

  • Between organic growth and acquisitions, there's a clear path for Generous to get to $1 billion in revenue, Dunn says, which would be about the right size for a dual-track process.
  • Meanwhile, interest in Bolthouse from strategics and sponsors, among others, has been consistent and robust throughout Butterfly's ownership.
  • Butterfly leverages its portfolio companies with debt of around 3x EBITDA on average, says Waglay.
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