In the second installment of our new series spotlighting the capital providers that are emerging as health and wellness specialists, we’re focusing on North Castle Partners.
Leveraging nearly two decades of experience in the healthy, active, and sustainable living markets, and with a portfolio which includes Barry’s Bootcamp and SLT, the consumer-focused private equity firm has a history of partnering with entrepreneurs, to guide them through the next stage of growth and development.
One of the first private equity firms to capitalise and focus on this sector, North Castle Partners strives to create equity value by accelerating operating performance and profitable growth. The company works collaboratively with entrepreneurs, founders and leadership teams to solve complex business problems by combining their experience and resources with knowledge, network and real-world experience.
Investing across a wide range of markets including fitness, beauty and personal care, food and beverage, active living and specialised nutrition, North Castle Partners looks for wellness businesses where brand, innovation and world-class execution come together to provide growth and value-creation opportunities.
Based in America, since its launch in 1997, North Castle Partners has made 28 investments in fitness and nutrition brands. Reviewing hundreds of investment opportunities annually, the equity firm recently closed its sixth fund, totalling $300 million.
With a view to continue supporting innovation in the wellness industry, read on to discover which wellness brands the firm has backed previously.
In 2006, North Castle sold Equinox to The Related Companies for $505 million. Investing in the operator of upscale fitness clubs in 2003, North Castle helped increase the chain’s presence in America, tripling the number of clubs and doubling membership in three years.
At the time Managing Director of North Castle, Chip Bard, said the firm was very proud of the businesses and its partnership with their management team.
“We believe that consumer interest in “Healthy Living and Aging” products and services is growing and that our focused approach to investing has generated tremendous opportunities for North Castle to create value,” he added.
In November 2006, North Castle announced the sale of California-based Naked Juice Company to PepsiCo. Terms of the agreement were not disclosed.
Since investing in the juice company in 2000, North Castle worked with Naked Juice to execute a series of major initiatives that upgraded the company’s branding and marketing, accelerated sales growth, and improved the company’s infrastructure and profitability.
Specifically, the company re-launched the brand in 2005 to enhance Naked Juice brand recognition through better communication of the product’s raw and witty character combined with its superior product quality and taste. In addition, Naked Juice introduced several new products including Extended-Shelf-Life products in order to increase its distribution nationwide.
“We are proud of the tremendous success the Naked Juice Company has achieved through our partnership with CEO Monty Sharma and the Naked Juice management team,” said Lou Marinaccio, a Managing Director of North Castle Partners at the time.
Marinaccio described PepsiCo is a global organization dedicated to health and wellness which, coupled with extraordinary marketing and sales capabilities, would position Naked Juice in such a way that it could successfully achieve the next stage of growth.
In September 2012, North Castle Partners completed an undisclosed investment in Curves International, Inc., the largest fitness club franchisor in the world.
“As a firm focused on businesses that promote Health, Wellness, and Active Living, an investment in Curves was natural for us,” said Chip Baird, North Castle’s Founder and Managing Partner at the time.
“We are excited to partner with the company’s founders, Gary and Diane Heavin, to reinvigorate this world renowned company by applying our knowledge and experience in fitness and wellness from our current and prior investments, including International Fitness, Equinox Fitness, EAS and Octane Fitness,” he added.
With the belief that Curves could evolve to continue to address the changing needs of consumers in the U.S. and abroad, North Castle’s investment has helped to guide the company to its next level of success.
Sprout Organic Foods
In June 2015, North Castle Partners acquired a controlling interest in Sprout Organic Foods – a developer, marketer, and distributor of premium organic foods, primarily serving the baby/toddler market.
For North Castle Partners, the transaction represented its fourth investment in the natural and organic nutrition sector. The terms of the investment were not disclosed.
“We are excited about the Sprout acquisition as our latest Nutrition platform that addresses the needs of today’s consumers,” said Alison Minter, North Castle Managing Director at the time.
“The organic baby food category is an attractive market with strong underlying fundamentals. Sprout is a strong brand that resonates with retailers and consumers, with a product portfolio that has meaningful competitive differentiation,” she added.
In July 2015 North Castle made a strategic investment in Barry’s Bootcamp. The investment is being used to fuel the growth and expansion of the brand, penetrating new markets as well as developing additional locations in existing markets.
“We are very excited about our investment in Barry’s Bootcamp,” said Jon Canarick, North Castle Managing Director at the time of the investment.
“With our prior experience in the fitness industry from our successful fully realized investments in fitness club operators Equinox Fitness and International Fitness Holdings (dba World Health and Spa Lady) and current investments in fitness club franchisor Curves International and fitness equipment supplier Octane Fitness, we will leverage our established network and knowledge in the industry to build Barry’s Bootcamp into one of the premier boutique fitness studio operators and brands in the world. We believe Barry’s can help consumers achieve their fitness goals and support those consumers who view fitness as a daily must and a key part of their overall lifestyle,” he added.
Terms of the investment were not disclosed.
In July 2015, North Castle Partners made a growth investment in the burgeoning vitamin brand SmartyPants.
“SmartyPants is one of the most attractive businesses we have seen in the nutritional supplement industry. The company’s strong product foundation, brand positioning and mission-driven approach differentiates its prospects in a crowded category,” said Alison Minter, North Castle Managing Director at the time.
Gordon Gould, Co-Founder and Co-CEO of SmartyPants Vitamins said North Castle’s mass market and Internet distribution experience, coupled by its expertise in product and channel expansion, would be an invaluable resource as the brand continued its upward growth.
In January 2016, North Castle Partners announced the sale of Octane Fitness, a leading manufacturer of zero-impact cardiovascular fitness equipment, to Nautilus Inc. for a purchase price of $115 million.
Originally investing in the manufacturer in 2005, North Castle was able to leverage their deep expertise in the fitness industry in partnership with the Octane team to build on their track record of innovating award-winning, patent-protected zero-impact cardiovascular fitness products.
“Our partnership with the Octane Fitness team is the most recent example of North Castle’s vision of realizing the power of values-based partnerships and experienced operating resources to help entrepreneurs take their companies to the next stage of their development – what we call ‘Full Potential Partnerships,’” said Chip Baird, CEO and Founder of North Castle Partners at the time.
In May 2016, North Castle made a strategic investment in American boutique fitness operator SLT. SLT will use the funding to expand in its existing markets as well as in the northeast United States and other locations.
Alison Minter, Managing Director at North Castle Partners said the investment was an example of how changing views toward healthier lifestyles are creating attractive businesses and investment opportunities.
The terms of this investment were not disclosed.