Invest Well: Consumer-focused Invesment Firm L Catterton Backs Wellbeing

Wellness, the $3.4 trillion mega-industry, is beginning to attract greater attention from venture capitalists, private equity firms and angel investors.

Earmarking athleisure, wearables, healthy restaurant concepts and transformational fitness brands with global appeal, specialist investment funds are setting up shop, with the intent to support innovation and growth within the healthy living sector — or HALO (healthy, active lifestyle and outdoors) as US investment firm, Integrity Square, have formally coined it.

A record number of wellness startups received significant investment in 2015, and as the amount of cash being injected into the industry grows, some investment firms are narrowing their focus on wellness, in a bid to find the next big brand with the potential to create significant returns.

Read more: The Wellness Industry is Ripe for Investment

With the surge in investments fuelling the growth of the wellness industry, in this new series, we’re spotlighting the capital providers that are emerging as health and wellness specialists, and shaping the market as we know it.

L Catterton

The largest global consumer-focused investment firm, with six distinct and complementary fund strategies focusing on consumer buyout and growth investments across North America, Europe, Asia and Latin America, L Catterton (formerly known as Catterton) has a 27-year history and more than 120 investment and operating professionals in 17 offices across five continents.

Merging with LVMH, the world leader in high-quality products, and Groupe Arnault, the family holding company of Bernard Arnault, in January of this year to create L Catterton. Catterton’s new partnership combines its existing North American and Latin American private equity operations with LVMH and Groupe Arnault’s existing European and Asian private equity and real estate operations, currently conducted under the L Capital and L Real Estate franchises.

With Headquarters in both the US and UK, two of the firm’s main investment sectors are personal care and wellbeing.

Driving fresh momentum for its companies, by repositioning and broadening their offering, expanding the distribution network and pursuing international development opportunities, enabling them to enter a new phase of dynamic growth, L Catterton has completed a number of high-profile investments in wellness brands since its launch in 1989.

Leveraging its category insight, strategic and operating skills, and network of industry contacts to establish one of the strongest private equity investment track records in the middle market, read on to discover more about the firm’s biggest wellness investments.

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Sweet Leaf Tea

In 2008, Sweet Leaf Tea, one of the nation’s fastest-growing makers of ready-to-drink iced teas, completed a $18m funding round from Catterton Partners.

The investment was used to increase the company’s marketing efforts and expand its national distribution, which at the time included Whole Foods, Kroger and Safeway.

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Plum Organics

Partnering with Plum Organics in 2010, Catterton Partners worked with the company’s management team to aggressively grow the Plum brand into a leading organic kid’s nutrition company.

With its complete line of organic products, unique food and flavor combinations, and innovative offerings and packaging, Plum has helped to revolutionize the baby food industry. With Catterton, Plum significantly grew its distribution channels, broadened its product assortment and expanded the brand to include offerings for toddlers and kids. In 2012, Plum Organics was the second fastest-growing food business in the U.S.

In May 2013, Catterton sold Plum Organics to Campbell Soup Company for an undisclosed amount.

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Snap Kitchen

In September 2013, Snap Kitchen, a US-based healthy takeaway brand, received an investment  Catterton Partners.

Terms of the investment were not disclosed, but in August 2015 the business completed a new $22 million fundraising round from Catterton and co-founder Bradley Radoff.

Used to drive accelerated retail growth and enhanced innovation, the investment allowed Snap Kitchen to further its goal of providing compelling and convenient solutions for customers seeking healthier eating options.

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Protein Bar

In October 2013, Protein Bar, a high-growth fast-casual restaurant chain in the US, specialising in healthy, on-the-go options, received capital investment by Catterton Partners.

The investment was used to foster the expansion of the Protein Bar concept across the country. Terms of the transaction were not disclosed.

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CorePower Yoga

In July 2013,  CorePower Yoga, the fastest growing yoga studio operator in the US, received capital investment by Catterton Partners. The investment was used to accelerate CorePower Yoga’s growth and expansion. Terms of the transaction were not disclosed.

“Yoga continues to experience growing adoption and is one of the fastest growing segments within fitness. As the leading and most expansive yoga studio brand, CorePower Yoga is well-positioned for continued success in this large and fragmented growth market,” said Marc Magliacano, a Partner at Catterton, at the time of the investment.

“CorePower Yoga brings yoga and fitness together, with the most experienced and credentialed instructors who offer a consistent experience and a wide range of classes for students of all levels across studios nationwide. We look forward to partnering with the talented team at CorePower Yoga to realize the tremendous vision for this Company.”

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FlyWheel Sports

In April  2014, Flywheel Sports, one of the nation’s fastest growing indoor cycling brands with 25 studios in the US received a capital investment led by the Benvolio Group, the personal investment arm of the Frankfort family, led by Lew Frankfort, Coach, Inc.’s Executive Chairman, and Catterton Partners.

The investment was used to accelerate Flywheel’s expansion both domestically and abroad and to enhance Flywheel’s leadership position as an innovator in the boutique fitness industry. Terms of the transaction were not disclosed.

Marc Magliacano, a partner at Catterton, said at the time, “As consumers are seeking personalized, intense and empowering cardio workouts, Flywheel is delivering an exceptional indoor cycling experience that seamlessly integrates technology into its program.  We are excited to join this stellar team and confident that Flywheel will continue to expand its base of devoted cyclers and further accelerate its already impressive growth trajectory.”

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Sweaty Betty

In February 2015, Sweaty Betty, a leading premium activewear brand whose purpose is to inspire women to find empowerment through fitness, received a strategic growth investment from Catterton.

Used to support Sweaty Betty’s growth and expansion in key markets, including the United States, terms of the investment were not disclosed.

At the time, Jon Owsley, a Partner at Catterton said: “Demand for women’s activewear in general, and for brands in the premium and ultra-premium segments in particular, is strong. Tamara, Simon and the entire Sweaty Betty team have created a true leader in the premium activewear category with a brand and differentiated product offering that is set apart for its cutting edge style, high quality and superior performance. We see a tremendous opportunity to build on these strengths and to extend Sweaty Betty’s reach in both new and existing markets. We are excited to partner with the Sweaty Betty team through this investment.”

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Pure Barre

In May 2015,  Pure Barre, the largest and most recognized barre fitness concept in the nation, received a significant growth capital investment from Catterton.

Used to support Pure Barre’s continued expansion across the U.S. and internationally, to capitalize on rapidly growing consumer participation in specialty and barre-based fitness. WJ Partners, which invested in 2012, remains an investor.

Terms of the transaction were not disclosed.

“We are thrilled to partner with Pure Barre, the clear leader in the barre fitness category,” said Marc Magliacano, Partner at Catterton.

“Pure Barre is well-positioned at the forefront of the specialty fitness industry, which is experiencing rapid growth as consumers are increasingly gravitating towards specialized fitness programs that deliver an outsized experience. We look forward to partnering with Pure Barre’s outstanding team and devoted franchise partners to support the brand’s continued expansion, while remaining true to its core values as the company grows its dedicated and enthusiastic consumer base. Pure Barre is the perfect complement to Catterton’s fitness portfolio.”

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Lily’s Kitchen

In August 2015, Lily’s Kitchen, a leader in natural and organic pet foods, today received a growth capital investment from Catterton.

The investment is being used to support the growth and expansion of Lily’s Kitchen into key domestic and international markets.

At the time, Howard Steyn, a Partner at Catterton, said: “Henrietta and her team have built an outstanding premium pet food brand with a loyal consumer following. We are excited to be backing this talented team, and we see tremendous opportunity to build on our long and successful track record in pet food and consumer products by helping Lily’s Kitchen grow and expand into new domestic and international markets.”

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CHOPT

In November 2015, Catterton led a significant investment in Chopt Creative Salad Company, a pioneer in the fast-casual salad segment.

Joined by The Hain Celestial Group, Inc., a leading organic and natural products company, the unique partnership combines Catterton’s deep experience in the restaurant and consumer space, the strength of Hain Celestial’s innovation and leadership position in natural foods and the lines-out-the-door popularity of Chopt salads and its dressings.

Terms of the transaction were not disclosed.

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Peloton

In December 2015 Peloton, the technology-enabled, vertically integrated, at-home fitness provider of live and on-demand instructor-led classes, received a $75 million growth capital investment from Catterton, bringing the total capital raised by Peloton since inception to $120 million.

Catterton’s investment is currently being used to accelerate innovation in the at-home fitness category and rapidly expand the brand’s awareness and market share.

“Peloton enjoys a loyal and rapidly growing rider base and is ideally positioned at the convergence of multiple fitness trends in the gym, studio fitness and home cardio markets, said Marc Magliacano, a Partner at Catterton.

“John and the Peloton team are pioneering the next evolution of fitness and changing the way people consume fitness at home, with a truly innovative business model and product that combines exceptional design with strong digital content that consumers love. We see a tremendous opportunity to build on these strengths and to expand Peloton’s reach in both new and existing markets and offer consumers additional at-home Fitness alternatives. We are excited to partner with the great people of Peloton to support their expansion.”

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Steiner Leisure

In December 2015, Catterton acquired Steiner Leisure Limited, a worldwide provider and innovator in the fields of beauty, wellness and education, for approximately $925 million.

“Steiner Leisure has built a portfolio of industry leading brands and businesses, including the global leader in spa management services on land and at sea, renowned skincare brands Elemis and Bliss, as well as the nation’s largest branded cosmetic services treatment provider in Ideal Image,” said Michael Chu, Co-Founder and Managing Partner of Catterton at the time.

“We are pleased to complete the transaction and look forward to partnering with the outstanding management team at Steiner Leisure to realize the many growth opportunities ahead.”

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Bodytech

In March 2016 Bodytech Corporation (“Bodytech”), the second-largest gym company in Latin America, received a significant growth capital investment by L Catterton to support and accelerate its continued growth throughout Latin America.

Terms of the transaction were not disclosed.

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