Private equity firms deal on wood pellet maker

LOUISVILLE — EagleTree Capital LLC has bought Lignetics Inc. from Taglich Private Equity LLC and Mill Road Capital Management LLC.

No purchase price was given in a press release about the deal.

Louisville-based Lignetics uses about 2 million tons of wood waste annually to make up to 1.4 million tons of wood pellets for use in home heating, for barbecues and to make cat litter and horse bedding. It sells at retailers under a dozen brands including Green Supreme, Bear Mountain BBQ, Catalyst Pet and EZ Equine.

The company has 22 manufacturing plants. A company profile on LinkedIn said it had 350 employees when it had 13 plants. It bought several companies under Taglich’s ownership, including Great Lakes Renewable Energy, a Wisconsin-based barbecue wood pellet manufacturer in April.

Middle market private equity investor EagleTree is in New York City with assets under management of $4.8 billion. It plans the purchase as a platform investment, meaning it intends add-on acquisitions with Lignetics as a starting point, the release said.

It bought Lignetics via EagleTree Partners V. Co-investors include Manulife Investment Management, Northwestern Mutual Capital and Thrivent Financial among others.

“We see incredible opportunities for growth in our barbecue pellet brands, Catalyst cat litter, and other new products in development,” Lignetics CEO Brett Jordan said in the release.

“The company is well positioned to capitalize on attractive tailwinds in residential pellet heating, pellet grilling and wood-based pet litter,” said EagleTree co-managing partner George Majoros Jr.

New York City-based Taglich bought Lignetics in March 2014. It puts $3 million to $20 million into firms with annual revenues of $15 million to $150 million and earnings before interest, taxes, depreciation and amortization of $4 million to $15 million. It buys majority stakes in niche consumer products makers.

Mill Road Capital invests state and corporate pension fund money, generally in small public companies. It was founded in 2004 by ex-Blackstone executives and is based in Greenwich, Connecticut.

Other backers with Taglich included Gladstone Capital Corp. (Nasdaq: GLAD) in McLean, Virginia, which invested $7 million, debt financing from Southfield Mezzanine Capital LLC in Greenwich, and an $8 million funding round in August 2020.

Investment banker Raymond James and law firms Moss Adams and Dentons Durham Jones Pinegar advised Lignetics. Law firms Jones Day and Alvarez & Marsal advised EagleTree.

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