Sports Nutrition
Milk Specialties Acquired by Private Equity Firm

Milk Specialties Acquired by Private Equity Firm

The whey and milk protein ingredient supplier has been acquired by American Securities, a New York-based private equity firm with $15 billion under management.

Whey and milk protein ingredient supplier Milk Specialties Global has been acquired by American Securities, a New York-based private equity firm with $15 billion under management. The company, which also offers powder contract manufacturing, has been owned by Kainos Capital since 2011. Financial details of the transaction, which is expected to close later this year, were not disclosed.

"Milk Specialties has a strong history of growth in an exciting market," said Dave Lenzmeier, CEO of Milk Specialties, which counts sports nutrition and dairy products as its key markets. “Demand for protein has soared driven by global population growth and interest in healthy lifestyles. We are excited about our new partnership with American Securities to support our growth goals in this expanding market."

Milk Specialties will remain in its Eden Prairie, Minnesota, location and retain its executives and more than 400 employees going forward.

“Every individual at Milk Specialties plays an important role, from operators who focus on producing the highest quality products to the executive leadership team," said Eddie Wells, president of Milk Specialties. "We are excited to match our dedicated and talented team with the resources of American Securities, and together focus on the goals we set to achieve." 

David Horing, a Managing Director of American Securities expressed full faith in the current Milk Specialties management team and lauded the ingredient supplier’s leading positions in the rapidly growing dairy protein and animal nutrition markets. “The company's commitment to product innovation, combined with its experienced and customer-focused management team, positions Milk Specialties for a strong future as a market leader," he said. “We look forward to bringing our resources to bear to support Dave, Eddie and their team for Milk Specialties' continued success."

American Securities has a portfolio with businesses from a wide range of industries, including consumer, healthcare, industrial and energy. It manages the restaurant chains El Pollo Loco and Potbelly Sandwiches as well as Healthy Directions, a direct marketer of nutritional supplements. 

Milk Specialties leaves the nest of Kainos, which maintains a family of natural health brands, including investments in InterHealth, Earthbound Farm Organic, and Healthy Delights.

Kainos reportedly began looking for a buyer in early 2015, hoping to fetch as much as $1 billion, including debt, according to The Wall Street Journal.

According to Moody’s, Milk Specialties had fiscal year (ended June 2015) revenues of $736 million with secured debt of around $282 million. The Investor service upgraded key ratings for Milk Specialties following the June 2015 annual report, noting the company significantly paid down debts with increased cash flow from improved margins for its whey protein concentrate and dry whey ingredients. 

Kainos declined INSIDER’s invitation to discuss the sale of Milk Specialties.

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