Harvest Hill re-launches sale process, may attract SPACs, sources say
03 September 2020
Harvest Hill Beverage Company, backed by Brynwood Partners, is looking again to find a buyer with its previous financial advisor JPMorgan, said four sources familiar with the situation.
The juice company, known for the Juicy Juice and SunnyD brands, has been sending books to potential suitors, three of the sources said. Harvest Hill is being marketed off around USD 120m to USD 125m adjusted EBITDA, these sources added.
Financial sponsors will be the primary suitors for the company, three of the sources said, with one of the sources noting that Harvest Hill could also see strong interest from a special purpose acquisition company.
Investors have backed a high number of SPACs in recent months with the goal of acquiring private companies and taking them public through a merger with the listed SPAC.
Some of the sources said Harvest Hill has seen some uplift in its business during the pandemic due to “pantry stocking” by consumers. Its legacy fruit juice brands such as SunnyD enjoy strong customer patronage as well, two of the sources noted.
Three of the sources said a buyer of Harvest Hill will likely be reticent to value the business at higher than 8x EBITDA. However, a SPAC could push the value slightly higher on account of free cash flow and position Harvest Hill as a high dividend paying public company, one of the sources said.
Last fall, Mergermarket reported that the Stamford, Connecticut-based company pulled its sale process after it failed to attract the USD 1bn valuation it reportedly sought.
Despite its value expectations, the sources cited in Mergermarket’s May 2019 report cautioned that Harvest Hill was more likely to be valued at 7x to 8x EBITDA, or USD 700m to USD 800m, given overall weak long-term trends in the beverage space and its portfolio of legacy fruit juice names, including Juicy Juice.
Harvest Hill was formed by Brynwood Partners in 2014 after the firm acquired Juicy Juice from Nestle [SWX:NESN] for USD 200m. The company has since served as a platform for beverage brands – acquiring American Beverage Corp in 2015 for USD 55m and Nutrament for an undisclosed sum from Nestle in 2016, among others.
Harvest Hill, Brynwood Partners and JPMorgan did not respond to requests for comment.
