By Abigail Summerville
NEW YORK (Reuters) - The private equity owner of Chosen Foods is preparing to explore a sale that could value the avocado-based food products company at around $600 million or more, including debt, according to people familiar with the matter.
Chosen Foods is working with investment banks Morgan Stanley and Bank of America on its sale process that is expected to launch later this year, the sources said, requesting anonymity as the discussions are confidential.
Los Angeles-based private equity firm Butterfly Equity, which manages nearly $4 billion of assets and focuses on the food and beverage industry, took a majority stake in Chosen Foods in 2021. Butterfly's other investments include vitamin maker MaryRuth Organics and fresh foods business Bolthouse Farms.
Chosen Foods generates 12-month earnings before interest, taxes, depreciation and amortization (EBITDA) of about $50 million, the sources said.
Butterfly, Chosen Foods, Morgan Stanley and Bank of America declined to comment.
San Diego, California-based Chosen, which was launched in 2011, makes cooking sprays, oils, condiments, dressings and other food products that are made out of fats from avocados.
The food and beverage sector has been a relatively bright spot for dealmaking over the past year, even as overall consumer deal volumes remain muted.
In September, J.M. Smucker agreed to buy Twinkies maker Hostess Brands (NASDAQ:TWNK) for $5.6 billion, including debt. In August, Campbell Soup (NYSE:CPB) struck a deal to buy Michael Angelo's and Rao's owner Sovos Brands for $2.7 billion
Unilever (LON:ULVR) recently acquired frozen yogurt brand Yasso in North America, while Flagstone Foods acquired Emerald Nuts from Campbell Soup last year.