AI Issue 6 2018

Acquisition International - Issue 6 2018 13 Investing in the Future focusing on high quality footwear, clothing and leather goods with a heritage inspired by the Australian outback, Primanti Brothers, an iconic Pittsburgh, PA-based restaurant brand with a unique and rich history dating back to 1933, and Baccarat, one of the world’s most iconic home luxury brands, operating a global, multi-channel business. Growing Concern for the Environment & Sustainability : Consumers are increasingly seeking environmentally responsible brands that promise health, safety and sustainability for the planet. L Catterton believes that environmentally conscious entrepreneurs have many significant, long-term opportunities to profit from ‘being green’ while acting responsibly. Select investments made by L Catterton along this trend include Fabindia, India’s largest private platform for products that are made from traditional techniques, skills and hand-based processes, Aquasana, which is committed to staying at the forefront of water, filtration engineering and innovation so every home can enjoy great-tasting, healthy water, and Getaway, which was founded in 2015 at Harvard University’s Innovation Lab by Jon Staff and Pete Davis, designs and operates “tiny house” rentals in beautiful rural areas just outside major cities. Operationally-Experienced Team L Catterton’s team includes 160 investment and operating professionals who partner with management teams around the world. This team brings more than 300 combined years of strategic, operating and financial experience in the consumer industry, providing real skill transfer to drive rapid operational improvements at portfolio companies. For example, L Catterton can support a management team by improving purchasing and supply-chains, manufacturing efficiencies, business analytics, pricing and margin enhancement, operating costs, and inventory and working capital optimisation. These highly differentiated resources underscore its commitment to be added-value partners. Take L Catterton’s transformation of Restoration Hardware, for example. In Restoration Hardware, L Catterton saw an opportunity to transform the company into a leading lifestyle brand by focusing on evolving the retail store model, expanding into new categories and making new hires in management, design and operations. Throughout their ownership, L Catterton supported Restoration Hardware’s transformation into a leading home furnishings brand in design, quality and value, doubled revenue from $600 million in 2009 to $1.5 billion in 2013, and achieved 13 consecutive quarters of double-digit net revenue growth through May 2013. “Our value to portfolio companies is our unique perspective, expertise in the consumer market and the ability to leverage our network.” – Michael Chu, Global Co-CEO Another example of L Catterton’s application of their operational expertise is their work with Ainsworth Pet Nutrition, a family-owned and operated company focused entirely on pets. Since investing in Ainsworth in 2014, L Catterton partnered with the Lang family and management to drive significant growth and value creation through a strategic plan focused on marketing and operational enhancements. Over the course of the four years of their partnership, L Catterton supported the rapid growth of the Nutrish ® brand through targeted marketing and advertising programs to create a market leader, while improving manufacturing and supply chain efficiency. In April 2018, L Catterton sold Ainsworth Pet Nutrition to the J.M. Smucker Company for $1.9 billion. Six Fund Strategies As a global firm with six fund strategies, L Catterton is in a unique position to partner with promising consumer brands around the world, regardless of geography or capital required. These funds include L Catterton’s Flagship Buyout Fund , which makes investments between $60m and $400m in middle market growth companies across North America and Europe. Recent investments and acquisitions out of the Flagship Buyout Fund include Equinox, the high-performance lifestyle leader, Leslie’s, the world’s largest retailer and online marketer of swimming pool and spa supplies and services, and Uncle Julio’s, a leading polished casual Mexican restaurant. L Catterton’s North America Growth Fund makes investments between $10m and $60m in middle market growth companies in North America. Recent investments out of the Growth Fund include Tula, a leading innovative skincare brand, and Lily’s Kitchen, the UK’s fastest growing pet food brand, dedicated to providing proper food for pets, with a commitment to tread carefully on the planet and transform the quality of the lives of pets and people through innovative, natural, healthy products and phenomenal customer care. L Catterton’s Latin America Fund makes investments between $40m and $75m in middle market growth companies in Latin America. Recent investments and acquisitions out of the Latin American Fund include Espaçolaser, Brazil’s leader in laser hair removal, and St. Marche, the supermarket chain that introduced a superior, innovative shopping experience to the food retail segment in Sao Paulo. L Catterton’s Europe Fund makes investments between € 25m and € 75m in middle market growth companies in Western Europe. Recent investments and acquisitions include Ole & Steen, a leading premium bakery and food-service chain in Denmark, Ganni, one of Scandinavia’s most successful advanced contemporary fashion brands, and Innis & Gunn, the largest craft beer brand in Scotland, ranking 2nd in the UK, famous for its selection of beers aged inside oak casks. L Catterton’s Asia Fund makes investments between $50m and $150m in local brands and retail and distribution businesses across Asia. Recent investments and acquisitions include Gentle Monster, the leading global eyewear designer brand. Finally, L Catterton Real Estate invests as a co-developer in large scale, mixed-use projects anchored by luxury retail. Recent developments include The Amazing Brentwood in Vancouver, one of the largest and most significant mixed-use projects underway in North America. Partnership with LVMH “By partnering with LVMH and Groupe Arnault, we created a firm with deep expertise and knowledge of the consumer sector with unparalleled access to resources around the world.” – Michael Chu, Global Co-CEO The transformational combination of Catterton with the private equity business of LVMH and Groupe Arnault in 2016 brought together Catterton’s 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, resulting in the largest, most diversified consumer-dedicated private equity firm in the world. By bringing together the global network and industry expertise of LVMH and Groupe Arnault with Catterton’s long-standing operational approach to building value in consumer investments, L Catterton can provide its investors and its portfolio brands a unique value creation platform. Recent Investments and Fundraising “2017 was an active year across our six investment platforms, reflecting L Catterton’s leadership in consumer investing globally.” – Michael Chu, Global Co-CEO After closing $4.2 billion in capital across four new funds in 2016, including L Catterton Partners VIII, L Catterton Growth Partners III and L Real Estate II, the firm continued its fundraising efforts in 2017 with L Catterton Asia III and L Catterton Europe IV. In 2017, L Catterton invested $2.3 billion in 26 consumer businesses across North America, Latin America, Europe and Asia. L Catterton had 17 exits and recaps totalling over $1 billion in 2017 including Ferrara Candy Company, ClearChoice, Mendocino Farms, PetVet Care Centers and Ainsworth Pet Nutrition. “At L Catterton, all our actions are guided by our credo: We will deliver superior risk-adjusted returns globally, by partnering with exceptional innovators and leaders to build enduring consumer brands and enterprises. We will collectively pursue excellence – guided by respect, collaboration, humility, and candour; fuelled by boundless curiosity; and leavened by humour – with a courageous spirit and a creative intellect.” – Scott Dahnke, Global Co-CEO