US – American private equity firm Butterfly has entered into a definitive agreement to purchase Milk Specialties Global, a human and animal nutrition and ingredient manufacturer from American Securities LLC.

The acquisition, in which transaction terms were not disclosed, is subject to customary closing conditions and is expected to close in the first quarter of 2023.

Founded in 1949 and based in Eden Prairie, Milk Specialties Global is an industry-leading, vertically integrated ingredient manufacturer focused on processing raw dairy inputs, such as milk and liquid whey, into value-added functional ingredients for a variety of growing nutrition end markets.

The company operates 12 state-of-the-art facilities strategically positioned across the US that allow the company to deliver high-quality, specialized ingredients and exceptional service to customers around the globe.

According to the press release, the Milk Specialties’ Human Nutrition segment is the largest producer of whey protein isolates in the world while its Animal Nutrition segment is a leading provider of science-based animal nutrition products for the dairy industry.

Butterfly said CEO and industry veteran David Lenzmeier, who has led the company for over fourteen years, will continue to lead the business from now on.

He has anchored Milk Specialties Global to have quick growth, posting 87% growth in 2021 to top US$1.5 billion in sales, according to Business Journal research. It’s the 18th largest privately held company in Minnesota, ranked by revenue.

“We are grateful for American Securities’ investment in Milk Specialties, which has helped us accomplish multi-faceted growth to create a new global platform in specialty nutritional ingredients,” said Mr. Lenzmeier.

“Throughout our partnership, we have achieved growth in three key areas: value-added and specialty products through strong R&D investment; co-manufacturing, which allows us to better deliver turnkey services for our customers; and international markets, serving new and existing customers on a global scale.”

Butterfly describes its investment strategy as “seed to fork,” with acquisitions ranging from agriculture and aquaculture to food and beverage products to food service.

In 2019, Butterfly bought a majority investment in Orgain, another nutrition brand, and then sold a large portion in 2022 to Nestlé Health Science.

In August 2022, the private equity firm bought Qdoba Mexican Eats from Apollo Global Management and merged the Mexican fast-casual chain with Modern Restaurant Concepts.

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