Dallas-based private investment firm Highlander Partners LP announced the merger of its portfolio company, Benestar Brands with Palmex S. de R.L. de C.V., a portfolio company of Chicago-based Wind Point Partners.
In this strategic move, Wind Point said it will become the majority shareholder of the combined business, while Highlander will retain a significant minority position. Financial details were not released.
“Uniting Benestar and Palmex marks a significant milestone in our strategic expansion. We have worked hard on building Benestar organically and through multiple acquisitions into a premier branded snack platform with a broad portfolio of exceptional snack products,” Highlander Partners President and CEO Jeff L. Hull said in a statement. “We’re thrilled about the endless possibilities this partnership opens up, including leveraging each company’s unique capabilities to drive growth and market penetration.”
The companies said the merger creates a powerhouse in the North American salty snack industry, positioning the combined entity as one of the leading providers of Hispanic and better-for-you salty snacks.
Benestar’s Pretzilla division to spin out
As part of the transaction, the Pretzilla division of Benestar, known for its fresh pretzel bread and snack products, as well as its state-of-the-art manufacturing facilities in Milwaukee, Wisconsin, will be separately spun out as a stand-alone business entity held by Highlander and Pretzilla’s management, including President and CEO Bruce Myers.
Chicago-based Benestar Brands operates as a holding company for leading brands of snack products, including Mac’s, 4505, Pretzilla, Turkey Creek, Cazo de Oro, PORQ and Chicas Tortilla Chips.
Benestar Brands is a leading manufacturer of pork rinds and top-quality restaurant-style tortilla chips, serving both domestic and international markets, while Pretzilla is a leader in the soft pretzel bread and snack categories.
Benestar operates seven production facilities across North America including Arlington, Chicago, Milwaukee, Portsmouth, Ohio; Minford, Ohio; City of Industry, California; and Saltillo, Mexico.
Headquartered in Monterrey, Mexico, Palmex manufactures better-for-you and Hispanic snack pellets, an intermediate component in various salty snack products such as veggie sticks and straws, three-dimensional snacks, food carriers, wavy snacks, and other unique forms.
Palmex CEO to lead combined company
Jose Luis Prado, the current chairman and CEO of Palmex, will step into the role of chairman and CEO for the combined organization.
Prado has more than 30 years of experience leading snack businesses at PepsiCo in the U.S. and Latin America and brings a wealth of industry knowledge to his new role. Myers will continue as president of the Benestar division within the combined company.
“This powerful combination of Palmex and Benestar represents a transformative step in our journey,” Prado said in a statement. “It not only accelerates our growth trajectory but also aligns our resources to innovate and capture emerging market trends effectively, both within the ethnic and better-for-you categories. Our goal is to leverage this combination to introduce a wider range of innovative products, thereby enhancing our portfolio of offerings and market reach.”
Leaders call deal ‘a game-changer’ in the snack food industry
Highlander Partners and former Benestar Chairman Jeff Partridge said this is an important deal for the industry.
“The snack market is rapidly evolving, and this merger is a game-changer. By combining Benestar’s renowned brand portfolio with Palmex’s state-of-the-art pellet extrusion capabilities, we’re setting the stage for a new chapter of innovation and accelerated growth at the company,” Partridge said in a statement. “Highlander will remain actively involved with the combined business from the board level, using its extensive food industry expertise to provide strategic guidance to the combined organization.”
Katten and Creel, Garcia-Cuellar, Aiza y Enriquez SC served as legal counsel, Alvarez and Marsal provided transaction advisory services and RSM provided accounting and tax services. Antares Capital provided financing facilities in support of the merger transaction and Capital One for Pretzilla.
Highlander Partners has more than $3 billion in assets under management and focuses on making investments in businesses in targeted industries in which the principals of the firm have significant operating and investing experience.
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