Industry News

Palmex and Benestar Brands merge, announce spinoff of Pretzilla division

The newly merged unit will represent numerous pork rind and salty snack labels.

Palmex and Benestar Brands merge, announce spinoff of Pretzella division — Courtesy of Benestar Brands

Highlander Partners, L.P., a Dallas-based private investment firm, has announced the merger of its portfolio company, Benestar Brands, with Palmex S. de R.L. de C.V., a portfolio company of Wind Point Partners ("Wind Point"). In this strategic move, Wind Point will become the majority shareholder of the combined business, while Highlander will retain a significant minority position.

According to the investment firm, the merger creates a powerhouse in the North American salty snack industry, positioning the combined entity as one of the leading providers of Hispanic and better-for-you salty snacks across the continent. As part of this transformational transaction, the Pretzilla division of Benestar (maker of fresh pretzel bread and snack products) will be separately spun out as a stand-alone business entity held by Highlander and Pretzilla's management, including President and CEO Bruce Myers.

Based in Chicago, Benestar Brands operates as a holding company for leading brands of snack products, including Mac's, 4505, Pretzilla, Turkey Creek, Cazo de Oro, PORQ, and Chicas Tortilla Chips. These brands encompass a variety of snack options, including pork rinds, tortilla chips, and other extruded snack products. Benestar Brands is a manufacturer of pork rinds and restaurant-style tortilla chips, serving both domestic and international markets, while Pretzilla operates in the soft pretzel bread and snack categories. Benestar operates seven production facilities across North America (Chicago; Arlington, TX; Milwaukee, WI; Portsmouth, OH; Minford, OH; City of Industry, CA; and Saltillo, Mexico).

Headquartered in Monterrey, Mexico, Palmex is a manufacturer of better-for-you and Hispanic snack pellets, an intermediate component in various salty snack products such as veggie sticks and straws, three-dimensional snacks, food carriers, wavy snacks, and other unique forms.

Jose Luis Prado, the current chairman and CEO of Palmex, will step into the role of Chairman and CEO for the combined organization. With more than 30 years of experience leading snack businesses at PepsiCo in the U.S. and Latin America, Prado reportedly brings a wealth of industry knowledge to the table. Mr. Myers will continue to serve as president of the Benestar division within the combined company.

"This powerful combination of Palmex and Benestar represents a transformative step in our journey," states. Prado. "It not only accelerates our growth trajectory but also aligns our resources to innovate and capture emerging market trends effectively, both within the ethnic and better-for-you categories. Our goal is to leverage this combination to introduce a wider range of innovative products, thereby enhancing our portfolio of offerings and market reach."

Jeff L. Hull, president and CEO of Highlander Partners, adds, "Uniting Benestar and Palmex marks a significant milestone in our strategic expansion. We have worked hard on building Benestar organically and through multiple acquisitions into a premier branded snack platform with a broad portfolio of exceptional snack products. We're thrilled about the endless possibilities this partnership opens up, including leveraging each company's unique capabilities to drive growth and market penetration."

Jeff Partridge, partner at Highlander and former Benestar chairman, also adds, "The snack market is rapidly evolving, and this merger is a game-changer. By combining Benestar's renowned brand portfolio with Palmex's state-of-the-art pellet extrusion capabilities, we're setting the stage for a new chapter of innovation and accelerated growth at the company. Highlander will remain actively involved with the combined business from the board level, using its extensive food industry expertise to provide strategic guidance to the combined organization."

Katten and Creel, Garcia-Cuellar, Aiza y Enriquez SC served as legal counsel, Alvarez and Marsal provided transaction advisory services and RSM provided accounting and tax services. Antares Capital provided financing facilities in support of the merger transaction and Capital One for Pretzilla.

KEYWORDS: merger spinoff

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Jenni Spinner is the chief editor of Snack Food and Wholesale Bakery with more than 25 years of experience in business-to-business communications. She has written extensively about food production, safety and packaging; pharmaceutical drug development; concrete and masonry construction; and more. She holds a Bachelor’s in Communications from the University of Illinois. Jenni can be reached at spinnerj@bnpmedia.com.