<p>Rumors are circulating about the possible sale of Earthbound Farms. Back in May 2013, Reuters reported that Earthbound was exploring a sale of the company and had hired Barclays to lead a sales process that could result in a deal valued at between $600 million and $700 million. </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>Most private equity buyout firms average a five to seven year holding period for owning a company, and HM Capital Partners, which originally acquired a 70% ownership interest in Earthbound in July 2009, is approaching that time frame. Senior professionals from HM Capital’s food and consumer products team formed a new firm called Kainos Capital in 2012 and currently manage all of HM Capital's previous investments. </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>Private equity interest in the fresh produce industry is rapidly growing. In 2005, Madison Dearborn Partners acquired Bolthouse Farms for $1.2 billion, at 14.0x EBITDA, according to market sources and then sold the company in July 2012 to the Campbell Soup Company for approximately 11.0x EBITDA, or $1.55 billion in cash. The deal generated a 2.4x gross return on invested capital for Madison Dearborn according to peHUB.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>Transactions like this have spurred significant interest among larger, global private equity firms. With rapid growth in organics for the fresh produce sector, global players are looking to get their hands on a piece of the pie and Earthbound Farms is a prime target. Private equity firms are also coming up against expiring investment periods, and time is running out for them to deploy billions of dollars of dry powder. This is also increasing firms’ interest in secondary buyouts, or so-called “pass-the-parcel” deals, which have mixed views amongst limited partner investors. </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p>Stay tuned to AndNowUKnow as we follow the possible sale.</p><hr class="legacyRuler"><hr class="invisible minimal-padding">
