Dallas-based private equity firm Kainos Capital LP announced the successful closing of Kainos Capital Partners III LP with more than $1 billion in capital commitments, the largest investment vehicle in Kainos’ history.

Kainos, which focuses on the food and consumer products and services sectors, said existing Kainos investors provided a significant amount of Fund III’s capital and referred many new investors to the fund.

“Our bench of seasoned investors and operators within the food and consumer sectors helps drive financial and operational performance by working hand-in-glove with management teams,” Andrew Rosen, managing partner of Kainos, said in a statement. “We believe Kainos’ sector experience, industry relationships, and robust operating capabilities make us an attractive partner to families and entrepreneurs who are excited about their business’ prospects yet seek to diversify their wealth.”

Kainos said it seeks to build strategically relevant food and consumer companies by implementing Change Capital initiatives, and leveraging its industry experience and relationships to help partner businesses capitalize on their growth opportunities and improve profitability.

Investing in food and consumer industry for more than two decades

The Kainos Capital Partners Fund III has invested in CellCore Biosciences. [Photo: CellCore]

Kainos said that many of the partners at firm have been investing in the food and consumer industry for more than 20 years and several were senior leaders in the industry before joining Kainos.

The firm said that its dedicated Kainos Operations Team works with portfolio companies to help drive manufacturing process improvement, supply chain and purchasing savings, financial organization and analysis, information technology enhancements, and talent recruitment and retention.

The Kainos team also owns a controlling ownership stake in MEMCO Engineering Solutions, a company that designs and implements customized, automated food and beverage manufacturing production systems, and works extensively with the firm’s portfolio companies.

Fund III will target family-owned businesses and corporate carve-outs

Kainos said that Fund III primarily will target family-owned businesses and corporate carve-outs in the food and consumer products sectors with at least $10 million in EBITDA.

It has found that these sellers—several of whom are investors in Fund III—often value Kainos’ sector experience and operating capabilities, and often retain ownership stakes in the businesses Kainos acquires.

Can commit $300M or more ‘in any single transaction’

Fund III can commit in excess of $300 million of equity,and potentially more with its Limited Partner co-investment program in any single transaction, the firm said.

To date, Fund III is roughly one-third invested across three platform acquisitions: CellCore Biosciences, a wellness company that provides dietary supplements that are primarily sold through the practitioner channel; Specialty Sales, a specialty dairy cow health distribution business; and Evriholder Products, a provider of impulse products and merchandising solutions for retailers.

Fund II’s portfolio currently includes Wellful (portfolio of health and wellness brands including Nutrisystem, Nugenix and Super Beta Prostate), Whisps (cheese snacks), along with two North Texas companies, Muenster Milling Co. of Muenster (pet food), and BeautyBio of Dallas (skincare products).

BeautyBio’s Jamie O’Banion [Photo: Jamie O’Banion]

Previously exited portfolio companies include Kettle Cuisine (soup and meal solutions), Ferraro Foods (specialty foodservice distribution), Olde Thompson (private label spices), good2grow (children’s beverages), SlimFast (weight management products), Country Fresh (fresh produce supplier), Florida Foods (specialty clean ingredients), and Trilliant (coffee products).

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