Sustainability-focused Paine Schwartz Invests in Chex Finer Foods to ‘Deepen Impact’

Private equity firm Paine Schwartz Partners is deepening its footprint in the sustainable food chain, announcing today its investment in value-added specialty food distributor Chex Finer Foods. The investment was made by Paine Schwartz’s $1.7 billion food and agribusiness-focused Food Chain Fund VI, though terms of the deal were not disclosed.

Founded in 1965, Mansfield, Massachusetts-based Chex distributes a wide range of specialty and natural food products – from The Good Crip Company chips to Seed & Shell pistachio butters – to independent grocery retailers, co-ops and natural food stores as well as regional and national chains.

As part of the transaction, Paine Schwartz will partner with Chex’s current management, including CEO Jeremy Isenberg, to help drive and accelerate growth and leadership in the industry. The firm believes there is “significant whitespace” across new and existing retail customers, per a press release.

The new investment comes as Chex readies to expand its capabilities and reach new geographies. Additionally, Paine Schwartz and Chex see an opportunity to pursue M&A in the fragmented food distribution space.

“What makes Chex special is our people and our partnerships – and this next chapter is about amplifying both. With Paine Schwartz, we found a partner who understands our space, respects our values and shares our long-term vision,” said Isenberg in the release. “Together, we plan to […] deepen the impact we make for our customers, our suppliers and our team.”

For Paine Schwartz, the investment builds on its portfolio of better-for-you food brands, which comprises Suja Life cold-pressed juice, Urban Farmer plant-based frozen pizza and Promix supplements. Its investments focus on two core themes: productivity and sustainability and health and wellness. Paine Schwartz has nearly $6 million in AUM, per its LinkedIn page.

The firm launched Food Chain Fund VI in 2021, marking its largest fund dedicated to investing across the food and agribusiness value chain to date – 17% bigger than its $1.4 billion Fund V. As of 2023, Paine Schwartz had already deployed 40% of Fund VI, including investments in AgroFresh Solutions, Costa Group, Elemental Enzymes and Monterey Mushrooms, among others.

Its investment in Chex comes more than a year after Paine Schwartz began tracking the distributor as it weighed its options in the food distribution space, with chief investment officer Angelos Dassios saying, “We have been impressed with Chex’s stellar reputation for reliability and service, best-in-class operating metrics and long-standing supplier and customer relationships.”

Harris Williams served as financial advisor and Brownstein served as legal counsel to Chex. Morrison Foerster served as legal advisor to Paine Schwartz, while Bain Capital Credit provided financing for the transaction.