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Simple Mills Appoints Sheryl O'Loughlin to Board of Directors

CHICAGO--(BUSINESS WIRE)--Simple Mills, the company on a mission to advance the holistic health of the planet and its people through delicious, better-for-you foods, today announced the addition of CPG industry veteran, Sheryl O’Loughlin, to its Board of Directors. O’Loughlin is an accomplished entrepreneur, CEO, author, and board member bringing extensive experience leading fast-growing, innovative consumer products companies. In her new role, O’Loughlin will provide strategic counsel and guidance to help support Simple Mills in scaling the company to the next level, creating opportunity for the brand to have a greater positive impact on its mission to advance the holistic health of the planet and its people.

A seasoned leader with more than 30 years of experience scaling CPG companies, O’Loughlin previously served as the CEO of both Clif Bar & Company and REBBL, and Co-Founder and former CEO of Plum Organics. During her time at REBBL, a super herb adaptogen beverage, O’Loughlin architected a product innovation, distribution, and velocity strategy that grew revenue 23-fold and increased margins by 20 points. This growth allowed the brand to work toward a regenerative, just supply chain and donate $1 million to Not For Sale, a nonprofit dedicated to co-creating a future without human trafficking. Alongside her outstanding leadership roles, O’Loughlin shares her entrepreneurial skillset with the Simple Mills team as the former Executive Director for the Center of Entrepreneurial Studies at the Stanford Graduate School of Business and author of “Killing It: An Entrepreneur’s Guide to Keeping Your Head Without Losing Your Heart.” She also has experience serving on several other notable CPG brands boards, sitting currently on the boards of PetIQ, Inc. (Nasdaq: PETQ), Miyoko’s Creamery, and S. Martinelli & Co. In this new role, O’Loughlin plans to draw on her expertise to amplify Simple Mills’ mission to pioneer the way the world eats by crafting food with purposeful ingredients intentionally selected to help advance the health of both people and planet.

“I am honored to be part of the highly-esteemed Simple Mills Board of Directors, especially on the heels of a successful growth year for the company,” said O’Loughlin. “I’m a longtime fan of the brand and particularly appreciate how Simple Mills honors the intersection of people and planetary health by utilizing nutrient-dense ingredients and adopting a unique approach to regenerative agriculture that have the potential to build healthy soil. It’s my passion to assist companies like Simple Mills in scaling their business in a way that aligns with their mission and values, while providing an example to other companies that an ethical business framework aiming to change our food system can be wildly successful. I've dedicated my time and effort to supporting talented leaders like Katlin Smith achieve their goals, and I'm thrilled at the opportunity to support the Simple Mills team on their journey to helping better the world.”

O’Loughlin joins Simple Mills Board of Directors alongside other leading experts in the space, including Amanda Steele, former Senior Vice President of Marketing at Annie’s and Numi Organic Tea; Dan O'Connell, Founder and CEO at Vestar Capital Partners; Kevin Mundt, Managing Director at Vestar Capital Partners; George Peinado, member at Hyde Park Angels; and Lew Semones former General Partner at Charlotte Capital Partners

Simple Mills better-for-you products are sold in more than 28,000 natural and conventional stores across the country. This includes national distribution with top U.S. retailers, including Whole Foods, Sprouts, Target, Walmart and Costco. In the last five years alone, Simple Mills has entered more than 20,000 new stores, increasing its brick-and-mortar availability by more than 300%. Aside from significant retailer growth, the brand also has a strong e-commerce presence both on Amazon and its own website. To learn more about Simple Mills, its commitment to advancing regenerative agriculture through ever-growing product innovations, and to find a retailer near you, please visit www.simplemills.com.

About Simple Mills

Founded in 2012, Simple Mills is a leading provider of better-for-you crackers, cookies, snack bars and baking mixes made with clean, nutrient-dense ingredients and nothing artificial, ever. Celebrating its tenth anniversary this year, the company has disrupted center-aisle grocery categories to become the #1 baking mix brand, #1 cracker brand, #1 cookie brand in the natural channelwith distribution in over 28,000 stores nationwide. Its mission is to advance the holistic health of the planet and its people by positively impacting the way food is made. For more information, visit www.simplemills.com.

Vestar Capital Partners Named to Inc.'s 2022 List of Founder-Friendly Investors

NEW YORKOct. 5, 2022 /PRNewswire/ -- Vestar Capital Partners, a leading U.S. private equity firm, today announced that it has been named to Inc.'s 2022 Founder-Friendly Investors list honoring the private equity and venture capital firms with the best track records of successfully backing entrepreneurs.

The list recognizes firms that entrepreneurs can trust and collaborate with while receiving the financial and strategic support they need to help accelerate growth. All the firms on the Inc. list have successful track records of remaining actively involved with the businesses in which they invest.

"Vestar is proud to once again be recognized by Inc. for our commitment to supporting founders as they unlock the growth potential within their businesses," said Dan O'Connell, Founder and CEO of Vestar. "Founders have many options when seeking a capital partner; working with a recognized firm that offers operational expertise, relationships, and a long-term perspective can be critical in achieving sustainable growth. Vestar is proud of our 30+ year track record of partnering with management to invest for growth, and we are eager to meet new entrepreneurs who can benefit from our partnership."

Vestar has invested nearly $3 billion in more than 25 founder- and family-owned companies since its inception in 1988, and its current portfolio consists of 10 founder-led businesses across Consumer, Business & Technology Services and Healthcare.

"Fully investing in an entrepreneur, and their innovative vision, involves far more than the financial investment. By developing relationships with and supporting entrepreneurs for the long-term, these private equity firms are more than investors, they're partners," says Scott Omelianuk, editor-in-chief of Inc. media.

Inc. compiled its list by surveying founders who have sold to private equity and venture capital about their experiences partnering with the firms, and examining data on how portfolio companies have grown during these partnerships.

Logo for Dr. Praeger's purely sensible foods.

Dr. Praeger's Sensible Foods Appoints John Sayour as Chief Financial Officer

ELMWOOD PARK, N.J.Sept. 29, 2022 /PRNewswire/ -- Dr. Praeger's Sensible Foods ("Dr. Praeger's" or the "Company"), a fast-growing brand specializing in delicious, nutritious plant-based frozen foods made from simple ingredients, announced that John Sayour has joined the Company as Chief Financial Officer. Dr. Praeger's is a portfolio company of Vestar Capital Partners.

"John brings over 30 years of diverse and progressive finance experience working for consumer goods companies. His deep experience with supply chain initiatives, his passion for developing talent, and his insights and analytics capabilities will be tremendous assets for the organization as we look to take advantage of strong tailwinds in the better-for-you food category," said Dr. Praeger's CEO, Andy Reichgut.

Mr. Sayour joins Dr. Praeger's from Blue Triton Brands, where he was Chief Transformation Officer and CFO of Supply Chain. Prior to that, he capped 22 years at Nestlé Waters as Vice President and CFO of Supply Chain. He was previously Director of Financial Reporting and Corporate Accounting at Fortune Brands, and he began his career as a Senior Auditor for Arthur Young. He holds a master's degree in finance and international business from the University of Connecticut School of Business and a bachelor's degree in accounting and computer science from SUNY University at Albany.

"Dr. Praeger's is uniquely positioned for success with an impressive portfolio of great tasting and health-sensible products, and I am very excited to be part of this talented team," said Mr. Sayour. "I look forward to working with Andy and the Dr. Praeger's team to find new ways to support the continued growth of the Company."

About Dr. Praeger's
For over 25 years, Dr. Praeger's Sensible Foods has offered delicious and convenient frozen food options for the whole family. Founded by two heart surgeons determined to make healthy food easily accessible, Dr. Praeger's is a leader in the all-natural, vegetarian, vegan, gluten free and kosher frozen food categories and has a wide range of products including Veggie Burgers, Bowls, Cakes, Puffs and Hash Browns, sustainable Seafood items, kids Littles and more. For more information visit www.drpraegers.com.

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Pet Honesty Appoints Steve Chopp as Chief Financial Officer

AUSTIN, TexasSept. 27, 2022 /PRNewswire/ -- Pet Honesty, a trusted leader in premium pet health products, announced that Steve Chopp has joined the firm as Chief Financial Officer. Pet Honesty is a portfolio company of Vestar Capital Partners.

Mr. Chopp brings more than 20 years of experience in leadership roles at high-growth, health and nutrition companies. Most recently, he served as CFO and COO for Bragg Live Food Products, the number one brand of apple cider vinegar, where he oversaw the finance, supply chain, and technology functions. Additionally, Mr. Chopp spent more than 15 years working in the rapid growth supplements industry, including eight years at Pharmavite, the makers of Nature Made vitamins and supplements, where he served as EVP and CFO. He also held senior roles in consulting with L.E.K. Consulting and Stern Stewart & Co. Mr. Chopp holds an MBA from Indiana University's Kelley School of Business and a B.S. in finance from California Polytechnic State University-San Luis Obispo.

"Steve is an accomplished leader with broad experience developing and executing high-impact strategies. He will be an invaluable asset as we continue our mission to elevate pet vitality to deliver more joyful moments for pet parents," said Richard Greenberg, CEO of Pet Honesty.

"As Pet Honesty's recent partnership with Petco illustrates, the Company is on a strong growth trajectory, and I look forward to partnering with the senior team during this exciting time as the Company continues to expand and deliver on its strategic plan," said Mr. Chopp.

About Pet Honesty
Pet Honesty, a trusted leader in premium, natural pet health products, is on a mission to help pet parents elevate their pet's vitality for more joyful moments together. Founded originally as an innovative e-commerce brand in 2018 and headquartered in Austin, TX, the company specializes in vet-approved pet supplements made with natural base ingredients and premium active ingredients, providing functional pet health benefits backed by science and certified by the NASC. Pet Honesty products are formulated in an FDA registered facility in the U.S.A. and available for purchase online at Pethonesty.com, Amazon, Chewy, Petco.com, and at Petco retail stores nationwide and select neighborhood pet retailers. For personalized guidance and education about Pet Honesty products, visit Pethonesty.com and follow @PetHonesty on Facebook, Instagram, TikTok and LinkedIn.

About Vestar Capital Partners
Vestar Capital Partners is a leading U.S. middle-market private equity firm specializing in management buyouts and growth capital investments. Vestar invests and collaborates with incumbent management teams and private owners to build long-term enterprise value, with a focus on Consumer, Business & Technology Services and Healthcare. Since inception in 1988, Vestar funds have invested $11 billion in 89 companies – as well as more than 200 add-on acquisitions – with a total value of approximately $52 billion. For more information on Vestar, please visit www.vestarcapital.com.

Logo for Vestar, in 3 colors.

Vestar Capital Partners Announces Promotions

NEW YORKAug. 15, 2022 /PRNewswire/ -- Vestar Capital Partners, a leading U.S. private equity firm, announced today the promotions of several investment professionals at the firm. The promotions include Neil Merchant, Mark Dirzulaitis, and Angela Yun to Principal, and Alex Veronneau to Vice President.

"We congratulate Neil, Mark, Angela and Alex on their promotions in recognition of their impressive growth, development and meaningful contributions to the Firm," said Dan O'Connell, Founder and CEO of Vestar. "We are fortunate to have such talented and resourceful young professionals who subscribe to our core values of hard work, creativity, transparency and teamwork."

Mr. Merchant, a member of the Firm's Business & Technology Services group, joined Vestar in 2018. He previously worked at Welsh, Carson, Anderson & Stowe focusing on healthcare and technology investments. Mr. Merchant holds both a BS in Economics, cum laude, and an MBA in Finance and Management, with Honors, from the Wharton School of the University of Pennsylvania.

Mr. Dirzulaitis, a member of the Firm's Business & Technology Services group, joined Vestar in 2019. Prior to Vestar, he worked at American Securities where he focused on private equity investments across a variety of sectors. Mr. Dirzulaitis began his career at Goldman Sachs, where he focused on growth equity investments in technology companies. He received a joint BA / MA from Johns Hopkins University, where he was elected to Phi Beta Kappa, and an MBA with Honors from the Wharton School of the University of Pennsylvania.

Ms. Yun, a member of the Firm's Consumer group, joined Vestar in 2019. Previously, she worked at Alliance Consumer Growth, a consumer- and retail-focused growth equity firm. Ms. Yun began her career in the Leveraged Finance Group and Financial Sponsors Group at Wells Fargo Securities. She holds a BS in Economics, cum laude, from Duke University, and an MBA from the Wharton School of the University of Pennsylvania.

Mr. Veronneau joined Vestar in 2019 after previously working as an Analyst in the Consumer & Retail Investment Banking Group at J.P. Morgan. He received a Bachelor of Commerce degree with first class honors from McGill University.

Dr. Praeger's logo.

Dr. Praeger's Sensible Foods Appoints Andy Reichgut as Chief Executive Officer

ELMWOOD PARK, N.J.July 26, 2022 /PRNewswire/ -- Dr. Praeger's Sensible Foods, a fast-growing brand specializing in delicious, nutritious plant-based frozen foods made from simple ingredients, announced today that seasoned CPG executive Andy Reichgut has been appointed Chief Executive Officer effective immediately. Founder Larry Praeger has moved into a Special Advisor role and will remain an active Board member of the Company. The Praeger and Somberg families will retain their ownership stake in the Company, which is a portfolio company of Vestar Capital Partners.

"Andy is a smart, thoughtful, innovative and resourceful business leader with a deep appreciation for strengthening organizational capability, and a strong track record of building brands and businesses," said Jeffrey Ansell, Dr. Praeger's Chairman and Vestar Strategic Executive Advisor. "I'm excited to work with Andy again, and I'm confident his vast packaged foods experience, including plant-based and better-for-you brands, will set him up for success at Dr. Praeger's. I'd also like to sincerely thank Larry for his incredible vision and passion for the brand, which experienced transformative growth under his leadership. We look forward to his continued contributions as a Special Advisor and active Board member."

Mr. Reichgut is a long-time CPG executive who brings more than 25 years of experience from the packaged food industry. He was most recently General Manager for Violife®, a vegan cheese company owned by Upfield. Prior to Violife®, Mr. Reichgut was Executive Vice President at New Classic Cooking, where he led the Veggies Made Great® business. Under his leadership, the business experienced significant growth fueled by the repositioning of the brand and strong innovation. Mr. Reichgut also has decades of brand management and innovation experience working with leading CPG brands at Pinnacle Foods, Mars and Reckitt Benckiser. He holds a Master's of Business Administration degree from University of Chicago and a Bachelor's of Science degree from Syracuse University.

"Dr. Praeger's is a brand I have admired for many years and am excited and honored to join the organization as its CEO," said Mr. Reichgut. "At a time when consumers are searching for healthier and more environmentally friendly foods, Dr. Praeger's is positioned extraordinarily well to leverage these tailwinds. I look forward to working with the Company's strong leadership team along with our partners at Vestar to fulfill the promise of this business."

"I'm excited to welcome Andy to Dr. Praeger's. His vision, coupled with a phenomenal team who care so deeply for our brand, will continue to bring delicious and healthy plant-based food for generations to come," said Mr. Praeger. "When my father put his name on a veggie burger 26 years ago, he could not have predicted the plant-based revolution that was to come. I am so proud, as I know he would be, of the part Dr. Praeger's has played in bringing delicious, nutrient-dense food to homes all over the country. Dr. Praeger's has truly been able to meet the moment, and I'm confident it will continue to do so in this exciting next chapter."

About Dr. Praeger's

For over 25 years, Dr. Praeger's Sensible Foods has offered delicious and convenient frozen food options for the whole family. Founded by two heart surgeons determined to make healthy food easily accessible. Dr. Praeger's is a leader in the all-natural, vegetarian, vegan, gluten free and kosher frozen food categories and has a wide range of products including Veggie Burgers, Bowls, Cakes, Puffs and Hash Browns, sustainable Seafood items, kids Littles and more. For more information visit www.drpraegers.com.

About Vestar Capital Partners

Vestar Capital Partners is a leading U.S. middle-market private equity firm specializing in management buyouts and growth capital investments. Vestar invests and collaborates with incumbent management teams and private owners to build long-term enterprise value, with a focus on Consumer, Business & Technology Services and Healthcare. Since inception in 1988, Vestar funds have invested $11 billion in 89 companies – as well as more than 200 add-on acquisitions – with a total value of approximately $52 billion. For more information on Vestar, please visit www.vestarcapital.com.

Headshot of Nikhil Bhat.

Despite Tech Sector Tumble, Big Data Beckons

Despite Tech Sector Tumble, Big Data Beckons
Mergers & Acquisitions Magazine
By Rich Blake
Published July 2022

Following the technology market rout during the spring, the growth-oriented private markets licked their wounds and picked their spots.

One of the leading subsectors deemed poised for expansion, regardless of on economic slowdown? Data analytics.

"Companies across the board are compelled to find a competitive edge to drive growth and profitability, especially in challenging times," says Nikhil Bhat, a managing director at Vester Capital and who helps lead the private equity firm's business and technology services investments.

"Harnessing big data is a source of competitive advantage." he says.

From asset management to supply chain logistics, there is a major push by companies to deploy cutting edge analytics. In little more than the past decade, the data science space has transcended the pages of "Moneyball" and moved into a realm marked by big strategic investments.

Research firm Fortune Business Insights predicts the "big data analytics" market will grow globally by 13 percent per year for the next six years, to become a $500 billion industry by 2028.

One of Vestar's more noteworthy data-driven deals involved carving Institutional Shareholder Services (ISS) Inc. out of MSCI Inc. That was back in 2014. Vester at the time backed management to grow ISS further out of its proxy-advisory-focused roots into a comprehensive corporate governance and ESG data analytics provider. Fast-forward to 2017 - ISS underwent a management buyout led by Genstar Capital - and capabilities expended further still. And then, last year, ISS hit a homerun: Deutsche Borse, pivoting from trading-related fees to delivery of real-time investor data, acquired it from Genstar for $2.2 billion. That's nearly seven times the price ISS reportedly fetched eight years prior.

“People like to talk about machine learning and A.I. and these are useful Tools,” Bhat explained. “But what matters most in this space is using a deep understanding of the customer to provide them with the insights they need to make better business decisions.”

Becoming a data-driven company is a heavy lift and natural impediments could thwart best-case scenarios for growth in demand for such services if only due to unpreparedness. Some 80 percent of major corporations surveyed by IBM say having a more robust data-architecture is currently a top priority, and also a challenge.

“Data analytics has invigorated legacy business models and upended traditional corporate cultures,” says Shaun Dookhoo, associate director at Shoreline, a global advisory firm which specializes in helping asset owners use data. Organizations that have harnessed data analytics have benefited immensely at the expense of their competitors, while laggards often struggle to establish the necessary culture required for leveraging data, according to Dookhoo.

A recent deal that underscores the breadth of the scope of the data science opportunity: Omers Growth Equity, a part of Toronto-based Omers pension system, in May of 2022 helped seed Imply Data Inc., valued at $1.1 billion. Imply develops real-time analytics databases. Its founders are the same developers who created Apache Druid, go-to software for open-source projects that transform vast datasets into actionable intelligence.

The deal was led by Thoma Bravo which not surprisingly has its fingerprints all over the big data space. In June 2016, the technology-focused private equity powerhouse firm took Qlik private in a $3 billion deal. Qlik does data visualization, the end result all this software wizardry. It's the output, as opposed to the input, all of it part of a sprawling continuum of data harnessing activities.

Silicon Valley-based Talend is an example of a leading player focused on pulling in and making sense of humongous, disparate flows of data coming like spray from a fire hose connected with myriad sources. Thoma Bravo took Talend private in a deal that closed last September. Final price tag: $2.4 billion.

“We're focused, post tech-crash, on sub-sectors of tech that we deem to be resilient and transformative,” says Chip Virnig, partner at Thomo Bravo. Cybersecurity is arguably one such area, he points out. And data analytics is another.

“Data analytics is a vast space with a lot of niches and complex components to it,” he says.

In addition to the input and output segments along the continuum there is a middle-phase segment. It's led by companies such as publicly traded Snowflake (storage) and Alteryx (blending and integrating data streams).

Companies are viewed by some in the industry as having no alternative but to push further into data science and related tools. The beleaguered, at times broken down, global supply chain is vividly illustrating the importance of having real time Insights. Companies need to know which suppliers are most reliable, which redundancy/contingency options are viable, where delays are happening, how raw materials can be obtained more cost effectively, and so on.

“The exciting thing about this market is with Al and ML (machine learning) we can now take live data feeds and deliver real time actions via automation,” Virnig says. “It adds a whole new element in terms of return on investment.”

One of the more impressive success stories to come out of the big data sector ties to the early months of the pandemic when Vyaire, a maker of ventilators, used Talend's data platform to ramp up production from six machines to 600. Rigorous analysis using every data point on the assembly line was distilled into a re-tool blueprint that identified a series of ultimately fixable chokepoints within the quality control process.

Applying big data strategy to analytics asset management can produce an enormous informational edge to this subsector. It'll continue to grow in line with the baseline amount or assets - tens of trillions of dollars, worldwide - to be managed, said Joe Donohue, vice chairman of DC Advisory, an M&A/private capital advisor serving growth companies in North America.

“Companies like Bloomberg, FactSet Reuters and S&P Global are in a race to capture market share,” Donohue said, pointing to what could be a forthcoming cycle of new strategic bolt-on acquisitions as priorities shift to areas of growth, such as, say, ESG.

In the case of Deutsche Borse, their push into ESG factor data was the driving force behind its purchase of ISS.

Vester has done several deals that illustrate the data analytics groundswell.

Back in 2018, Vestar led an investment in Information Resources Inc. (IRI), which at the time, was owned by New Mountain Capital who retained a significant stake in the company. Not to be confused with ISS, IRI is a leading global provider of big data and predictive analytics to the consumer packaged goods sector, integrating otherwise disconnected consumer data streams (purchase habits, media consumption, as well as social, causal and customer loyalty data) to help corporate customers grow their businesses. This past April, IRI announced plans to merge with NPD Group, a global consumer data provider to the general merchandise and food service sectors, bringing together complementary, leading data assets on an advanced technology platform. Hellman & Friedman, which owns NPD. will acquire a majority stake, while Vester and New Mountain will retain significant minority stakes in the combined company.

Previously, Vestar’s Healthcare team, in 2017, led an investment into a founder-owned company called Quest Analytics, a leader in health plan provider network management analytics software. This deal exemplified the trend towards investing in vertically focused software and data analytics companies. Quest has since made, with Vestar's backing, two strategic acquisitions to expand its data sources and analytics capabilities.

“Health plan networks are characterized by massive amounts of complex, dynamic data on healthcare providers” Bhat said.

By investing heavily behind its technology and analytics capabilities, Quest created a platform that enables health plans to build high-quality networks.

“That drives positive health outcomes for members,” he said. “Something everyone in the industry wants to achieve.”





Logo for Stratus.

Stratus, a Global Leader in Brand Implementation and Facilities Services, Adds Bryan Hartnett as COO

Mentor, OH, June 7, 2022 – Stratus (or “the Company”), a market-leading asset-light facilities services provider, announced today that Bryan Hartnett has joined the Company as Chief Operating Officer, effective immediately. He replaces former COO Dave Walters, who recently retired from Stratus.

“We are pleased to welcome Bryan, a seasoned executive who has deep experience in facilities services and an outstanding track record of driving best-in-class operations and client satisfaction,” said Tim Eippert, founder and CEO of Stratus. “At Stratus, we create solutions that take brands and people to the next level. Bryan really connected with our mission, and I look forward to partnering with him to bring it to life. I’d also like to personally thank Dave for his many years of dedicated service to Stratus, and wish him the very best in his retirement.”

Mr. Hartnett joins Stratus from Vixxo, an integrated facilities management company, where he served as SVP of Customer Operations after a decade as President of the East Division. Prior to Vixxo, Mr. Hartnett was CEO and founder of National DCP, a company supporting franchisees of Dunkin' Brands. Previously he was COO of Dunkin' Donuts N.E. Distribution Center, a regional purchasing and distribution cooperative serving 2,500 Dunkin’ Donuts franchise locations. Mr. Hartnett began his career in public accounting.

“I am thrilled to join Stratus during this exciting period in the Company’s evolution,” said Mr. Hartnett. “Across all sectors, our clients are looking for innovative solutions to attract consumers in a competitive market. Stratus’ reputation of partnering with blue-chip clients to deliver creative branding solutions and facility maintenance services are second to none. I look forward to working with Tim and the entire Stratus team to expand our offerings and explore new ways to better serve our clients.”

About Stratus

Stratus is a leading brand implementation and facilities services company offering signage solutions, brand environments, energy services, repair and maintenance programs, and refresh and remodel capabilities across 50 states and 24 countries. With more than 50,000 projects completed annually, the Company provides versatile solutions for some of the world’s largest and most recognized brands. Stratus is a portfolio company of Vestar Capital Partners. For more information, please visit www.stratusunlimited.com.

Headshot of Nikhil Bhat.

Vestar’s Nikhil Bhat: Information services are ‘in the middle innings of a shift’

Vestar’s Nikhil Bhat: Information services are ‘in the middle innings of a shift’
PE Hub
By Mary Kathleen Flynn
Published May 25, 2022

"Vestar seeks companies that 'use technology to aggregate, integrate, and analyze mission-critical data sources to drive high-impact insights for their customers."

Vestar Capital was early to recognize the value of companies that leverage data in sectors including healthcare. The New York private equity firm is still investing heavily in data-driven companies. In April, Hellman & Friedman agreed to acquire a majority stake in IRI and merge it with H&F portfolio company NPD. Vestar and New Mountain Capital will retain significant investments in the combined company. The deal is expected to close in the second half of the year. For insights on how the use of data has changed over the years and how PE is investing in data targets today, PE Hub reached out to Nikhil Bhat, Vestar partner and co-head, business and technology services.

How has the role of data evolved in businesses, and what are private equity firms investing in today?

Data has always been a key input in helping companies make critical business decisions. Over the last 10-15 years, the quantity of available data – about customers, products, markets, supply chains and internal operations – has grown exponentially, while the difficulty of acquiring this data and the cost of computing power to analyze it have shrunk dramatically. Companies who can make sense of this data are able to make better business decisions to drive growth and profitability; but given the sheer volume and complexity of the information, this is not easy.

We are looking to invest in vertical information services companies that use technology to aggregate, integrate and analyze mission-critical data sources to drive high-impact insights for their customers.

What is driving dealmaking in the sector?

We are in the middle innings of a shift in what drives value and differentiation for information services businesses. Previously, it might have been enough to provide a proprietary data source, and deliver a raw data product to customers in a database or spreadsheet. Today, value is driven by providing customers with self-service tools to quickly extract actionable insights from the data, and seamlessly integrating these tools into client workflows to support augmented decision-making. The most advanced companies, agnostic of size or industry, are using artificial intelligence and machine learning to further enhance speed and quality of analytics.

Every company is at a different stage of this transition. We get most excited by opportunities to help management teams invest behind technology and innovation to accelerate their evolution along this curve. Industry consolidation is another major opportunity; acquiring adjacent data sources or analytics technologies and combining them into a single solution that integrates into multiple client workflows can drive significant value for the customer, which in turn drives growth and value creation in the investment itself.

What are some of the data analytics companies Vestar has invested in recently and why?

Previous Vestar investments in the data analytics space include Press Ganey, Institutional Shareholder Services, MediMedia and StayWell. Current investments in the space include IRI, a provider of big data and predictive analytics to the CPG industry; Quest Analytics, a healthcare provider network management software and data company; LERETA, a data- and tech-enabled services provider to the mortgage industry; and Mercury Healthcare, which provides predictive analytics around healthcare provider and consumer engagement.

In each of these investments, we’ve been excited to partner with best-in-class management teams to invest behind innovation and technology, bolstered by strategic M&A, to fuel growth by creating value for the customer. For example, when we carved ISS out of MSCI, management had a vision to stand up a best-in-class technology architecture and use this to accelerate innovation. This technology investment, in addition to five strategic acquisitions, helped management transform the growth profile of the business in a relatively short timeframe.

Quest Analytics is another great example, where we’ve invested heavily in talent, product, and technology, and made two important acquisitions. As a result of these efforts, the company has nearly quadrupled in size since we made our original investment in 2017.

Tell us about exits. What are the opportunities?

There is an active buyer universe for best-in-class data analytics companies. We spoke earlier about industry consolidation – there are a number of larger, vertically-focused information services companies that have active M&A efforts and can be great homes for our investments. Larger-cap private equity can also be great partners for our investments and management teams, since many of the value drivers we’ve been discussing today are still highly relevant at larger scale. The public markets have historically been an attractive option as well, ascribing significant value to data analytics companies’ recurring revenue, robust growth profiles and attractive economic models.

Let’s talk about IRI. Walk us through how you grew the firm, how the merger with Hellman & Friedman’s NPD came about, and why you held onto a minority stake in the combined company?

We’re very proud of what IRI’s management team has accomplished over the course of our partnership. When we made our investment, we were impressed with IRI’s Liquid Data technology platform, which provides cutting-edge predictive analytics, visualization and decision support tools that help customers make sense of the vast and growing ocean of first- and third-party consumer data. Since then, the company has invested heavily behind innovation – with Liquid Data as its backbone – to create and grow new products that enable mission-critical decision-making across almost every aspect of our customers’ businesses. In addition, IRI has made three strategic acquisitions over the last three years to accelerate its product development roadmap in high-growth areas. These investments, paired with great execution and continued share gain in the core, have led to significant growth and value creation at IRI.

We’re incredibly excited about the merger of IRI and NPD, which will create the premier global information services provider to the consumer goods industry. Bringing together the companies’ complementary data sources – IRI’s CPG data and NPD’s general merchandise and foodservice data – on a single, leading-edge technology platform will allow the combined company to create new, superior products that help brands and retailers collaborate, better serve their customers, and navigate an increasingly complex and dynamic consumer behavior landscape.

It’s probably clear why we wanted to maintain a significant minority stake in the company. The potential for innovation, and resulting enhancement to the customer value proposition, should be a catalyst for growth, and we have tremendous confidence that the combined company’s management team will bring IRI and NPD together in a way that creates meaningful value for clients, employees and investors alike.

How are macroeconomic forces, including inflation, rising interest rates, supply chain problems and labor shortages, affecting deals in the sector?

On balance, these forces are a net positive for data analytics businesses. Factors like input cost inflation, wage increases, shifting customer behavior, and supply chain frictions are complex and opaque; good information services companies bring transparency to these issues, and help customers both mitigate risks and identify opportunities stemming from these market dislocations. As a result, our data analytics investments are becoming more important partners to their customers than ever before.

What’s the future for PE-backed deals in data analytics?

The industry dynamics we’ve been discussing today are long-term, secular growth drivers that are likely to support significant continued private equity activity in the information services space. The amount of data available to companies around their operations, customers and markets will continue to grow; the analytics technologies will continue to become more powerful; and as a result, the need for data analytics businesses’ solutions should continue to accelerate. We’re certainly excited to continue investing in the space, and see a lot of opportunity going forward.

Logo for Friday Health Plans.

Friday Health Plans Raises $120 Million In New Funding

DENVER , May 25, 2022 /PRNewswire/ -- Friday Health Plans Management Services Company, Inc., ("Friday") a Denver-based health insurance holding company, announced today that it has signed an agreement for $70 million of equity investment led by Leadenhall Capital Partners ("Leadenhall"). Vestar Capital Partners, Peloton Capital Partners and other partners also contributed to this latest investment. Leadenhall will also provide $50 million in debt financing.

Following 400% membership growth year over year for the last two years, Friday will leverage the funds primarily to support expansion into new Affordable Care Act marketplaces.

"More people are finding value in our simple, practical health plans designed for people who don't get insurance through their employer," said CEO of Friday Health Plans, Sal Gentile. "We are built specifically to give them great health benefits and superior service -- all at an affordable price. And we're able to do this because we focus solely on serving this growing consumer segment."

Friday currently serves more than 330,000 members across seven states with an estimated $1.95 billion in gross premium revenue for 2022. Most of Friday's health plans include unlimited $0 primary care visits, $0 mental health counseling, free generic drugs and free telehealth visits. Consumers can purchase the plans on the national or state-based health exchanges, through brokers, or directly on Friday's website.

"Having worked with the management team at Friday for a number of years, we have observed their expertise in bringing affordable health protection to a growing number of people. We are excited about supporting the future growth prospects of the company through this capital round," said Tom Spreutels, Managing Partner at Leadenhall.

Friday Health Plans was started in 2015 by Sal Gentile and David Pinkert, two health technology industry veterans. After the passage of the Affordable Care Act, the pair wanted to start a simpler, friendlier health insurance company, better designed for consumers not receiving health insurance from their employer.

With headquarters in Denver, Colorado, Friday has grown exponentially in the Affordable Care Act space through acquisition and organic growth. The company has expanded its employee base to more than 600 people across the country, with operations centers in Alamosa and Pueblo, Colorado.

About Friday Health Plans: Friday Health Plans is purpose-built specifically for people and who buy their own health insurance. The company focuses on overall simplicity to offer affordable health plans with benefits that help members stay healthy and cover them if they get sick or hurt. Operational efficiency, top-notch customer service, and smart technology are core to Friday's consumer-centric approach. All insurance plans and services are offered and administered through licensed subsidiaries of Friday Health Plans, Inc. For more information and to find a health plan, visit www.fridayhealthplans.com.

About Leadenhall Capital Partners:

Leadenhall Capital Partners is a UK-based institutional investment manager focused on making investments in insurance related opportunities, with ca. USD 6bn of assets under management. Established in November 2008, Leadenhall Capital Partners has made over 150 investments in life and health insurance related risks and has supported companies at various stages of their growth cycle. Leadenhall has the expertise to identify promising investment opportunities whilst also backing companies which may provide access to attractive life and health risks for its investment portfolios. Investments are made across the capital structure. For additional information on Leadenhall please visit www.leadenhallcp.com