By Nikitha Sattiraju On September 23, 2021
Two things matter most to consumer-focused private equity firm Traub Capital Partners when it comes to choosing the right investment.
The first is powerful, legacy brands that the firm, which closed its inaugural fund last week, can reposition for higher growth, according to managing partner Mortimer Singer.
“We take our duties seriously to find existing companies that are incredibly profitable — legacy businesses that have been around for decades, not just years — and take them to the next level,” Singer said. For instance, the firm, a sister company of consulting firm Traub, owns Signature Brands LLC, which houses popular baking businesses Betty Crocker and Cake Mate.
The second aspect that is a draw for Traub Capital is the “enthusiast customer” segment, which attracts consumers enthusiastic about a certain way of life, such as fitness, sports, healthy living or outdoor pursuits.
The ideal business for Traub Capital is one that can fit into both these buckets. This, according to Singer, is because the lifetime value of a consumer is extended by the enthusiasts who will amplify their engagement when they are passionate about both a brand as well as a cherished activity.
The firm, which targets fitness, health and wellness, outdoor living and beauty, among other subsectors, also owns Mana Products Inc., a private-label manufacturer of prestige beauty and skincare products. Traub Capital bought the two companies through the inaugural fund in 2018 and 2020, respectively.
The two investments add up to $400 million in transaction value, according to a statement from Traub Capital. The firm, which has $173 million in assets under management, typically targets companies with $50 million to $250 million in revenue for platforms.
Now that Traub Capital has restocked its dry powder, it’s also assessing add-ons for Signature Brands and Mana Partners, in addition to platform acquisitions, Singer said.
The firm's relationship with Traub is also an added benefit, as it gives the firm an extra layer of access to find new deals, Singer said.
The New York-based firm’s founding partners — Geoffrey Lurie, Brian Crosby and Singer — previously led consumer brands such as North Face, worked for consumer and retail private equity firms Sycamore Partners LLC and Falconhead Capital LLC and served as an investment banker at JPMorgan, respectively.
FROM LEFT TO RIGHT: Brian Crosby (Managing Partner), David West (Managing Director), Geoffrey Lurie (Managing Partner), Mortimer Singer (Managing Partner)
A key part of Traub Capital’s strategy involves operational support post-acquisition. The team considers itself “a part of the furniture” at its portfolio businesses, Singer said.
“We’re the air force to the infantry of the management team on the ground and do not just show up once every three months to board meetings,” Singer said.
At Signature Brands, for instance, Traub Capital started out by adding executives to the existing management and engaged in team-building efforts. The firm also focused on improving Signature Brands’ top line and organization, which was highly inefficient, according to Singer.
Traub Capital added new revenue layers such as launching Signature Brands products on e-commerce marketplaces such as Amazon.com Inc. (AMZN) and exploring international expansion. But most importantly, according to Singer, the firm changed the messaging around the brands owned by Signature to better attract and retain customers.
“One of the team's crowning achievements was repositioning a collection of brands, where one once asked, ‘What business are you in?’ to today being a cohesive platform all about creating meaningful memories with families,” Singer said