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Kroger doubles down on private equity

Grocer partners with MidOcean to discover CPG's next top brands

Happy Friday. Here’s what we’ve got today…

  • A look at MidOcean’s collaboration with grocery chain Kroger

  • The deal sheet, plus the story behind Houston’s most notable bankruptcy judge


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Yesterday, MidOcean Partners and grocery chain The Kroger Co. announced the launch of MPearlRock, a new joint venture that’s hoping to find and back the next generation of consumer packaged goods brands.

The platform is characterized as a “strategic collaboration” between MidOcean and Kroger’s existing brand investment initiative, PearlRock Partners, itself launched alongside Lindsay Goldberg in 2019 as part of the Restock Kroger turnaround initiative.

A slide worthy of inclusion in a WeWork or SoftBank deck

In addition to Kroger’s feeding of the human spirit, Restock Kroger highlighted the company’s “alternative profit streams portfolio” as a path to add an incremental $100 million of operating profit.

Alongside PearlRock, the alternatives portfolio includes 84.51°, Kroger’s data analytics subsidiary; Kroger Precision Marketing, which manages ad sales to brands; and Kroger Personal Finance, the chain’s credit card program.

Lindsay Goldberg’s involvement, however, was evidently short-lived – though no formal announcement was ever made, the sponsor appears to have quickly exited the Kroger collaboration. There’s no mention of the firm’s participation in the partnership outside Kroger’s 2019 launch announcement, which was also the last time Kroger discussed PearlRock in any capacity.

By the summer of 2020, Fremont Macanta, a joint venture between the Bechtel family office and Terry O’Toole’s family office, had been quietly listed as Kroger’s new partner on PearlRock. The platform hasn’t publicly announced any investments.

One important holdover from Lindsay Goldberg’s fleeting participation is Brian Kelley, a former partner at the firm who was named as PearlRock’s CEO and is now taking the top job at MPearlRock. His prior CPG experience includes stints as President of Coca-Cola’s North American operating unit and as CEO of Keurig Green Mountain.

The Strategic Outline

MPearlRock is targeting control or active minority investments in North American food and beverage brands operating at between $50 - $150 million of revenue and greater than $1 million of EBITDA.

A key component of the platform’s thesis is the involvement of Kroger’s analytics imprint 84.51°, which MPearlRock has said will play a part in the firm’s brand identification and sourcing work. Post-investment, 84.51° will also provide portfolio companies with marketing-focused data and customer insights.

MPearlRock’s strategy also includes a heavy operational focus—beyond the data science angle—with the firm committing to provide portfolio companies with the expertise to optimize distribution, in-store testing, manufacturing, procurement, supply chain, and hiring.

For brands worried about what they could be signing up for, parent firm PearlRock has previously noted that its “investment decisions and brand-level strategy are managed by a team fully dedicated to growing PearlRock Partners and its portfolio brands, independent of The Kroger Company.” The firm also clarifies that an investment does not force brands into an exclusive relationship with Kroger, though may help with access to the chain’s more than 2,800 stores.

Kroger has committed its own capital to PearlRock, though its broader incentives for involvement in the effort remain unclear. At the time of PearlRock’s initial launch, industry-focused publication Retail Wire speculated that the collaboration could help Kroger expand its private label offerings, including its 11-year-old Simple Truth line.

MidOcean: The Third Investment Firm to the Party

MidOcean Partners, launched via a 2003 management buyout of Deutsche Bank’s private equity business, invests across both private equity and private credit strategies. On the private equity side, current and realized consumer investments include Fresh Pet, Jenny Craig, Nutrabolt, Casper’s Ice Cream, and Louisiana Fish Fry.

The exact structure of MidOcean’s involvement in the MPearlRock venture also remains unclear, though likely includes a commitment from the firm’s $1.5 billion sixth fund that it closed in April of last year. Early indications do point toward active participation, with MPearlRock’s team page including profiles of MidOcean investment professionals ranging from associates through operating partners and the firm’s founders.

Broadly, joint ventures with strategics have become more popular for private equity in recent years. Alongside the possibility of additional capital (that may earn management fees for the sponsor), the arrangements can provide benefits like the strategic’s industry expertise, potential synergies, and future exit opportunities for portfolio companies.

For Kroger, while there’s no brand exclusivity for portfolio companies, the grocer’s involvement may entitle it to some form of call rights, rights of first offer, or rights of first refusal for portfolio companies nearing an exit.

Any such arrangement, however, would have been heavily negotiated with both MidOcean and Fremont Macanta.


BlackRock agreed to acquire Global Infrastructure Partners for $12.5 billion. GIP is the world’s third-largest infrastructure investor after Macquarie and Brookfield.

DocuSign (Nasdaq: DOCU), an electronic signature and digital transaction management firm, is considering a potential takeover bid from private equity firms Bain Capital and Hellman & Friedman.

Novartis (SWX: NOVN) has abandoned its pursuit of biotech Cytokinetics (Nasdaq: CYTK). Interest in a potential $10 billion deal was reported earlier this week.

Chesapeake Energy (Nasdaq: CHK) has agreed to acquire Southwestern Energy (NYSE: SWN) for $7.4 billion, excluding debt.

WPP Group (LSE: WPP) is considering exit options for its 40 percent stake in Kantar (after selling 60 percent to Bain Capital in 2019), a market research business that could be valued at more than $3 billion, per Bloomberg.

Hellman & Friedman is prepping an exit for Enverus, a provider of energy data solutions, through either a sale or IPO, per Bloomberg.

PAI is said to be exploring strategic options for its $10 billion Nestle Ice Cream joint venture.

Thomson Reuters (NYSE: TRI) has made an offer to acquire Pagero Group, an electronic invoicing and procurement solutions provider, for $627 million, topping a previous $555 million offer from Vertex (Nasdaq: VERX).

Grupo Mexico is considering a bid for First Quantum Minerals’ Spanish copper mine, Cobre Las Cruces, for a valuation that could be up to $1 billion.

First Insight, backed by Updata Partners, acquired SnapRetail, a provider of digital marketing solutions for retailers.

Bending Spoons, an Italian app development company backed by Neuberger Berman, acquired Mosaic Group, a digital media and marketing firm, from IAC for over $100 million.

KV Capital acquired Travel Buggy, a designer and manufacturer of foldable power wheelchairs.

Manulife Investment Management and Carlyle acquired a minority stake in NineDot Energy, an energy storage projects developer.

One Equity Partners has agreed to acquire the Associated Spring and Hänggi businesses from Barnes Group (NYSE: B) for $175 million.

Platinum Equity acquired E&A Scheer, a Dutch-based premium rum blending specialist, from The Riverside Company.

Intel Corporation (Nasdaq: INTC) acquired Silicon Mobility, a developer of energy management solutions for electric vehicles.

Stone Point Capital is considering the sale of its stake in Tree Line Capital Partners, a direct lending firm.

Authentic Brands Group acquired Sperry, an American footwear brand, from Wolverine World Wide (NYSE: WWW) for around $130 million.

LondonMetric Property has agreed to acquire LXI REIT Plc, a London-based real estate investment trust, for £1.9 billion ($2.4 billion).

Madison River Capital invested in Senior Care Therapy, a NJ-based provider of patient-centered psychology and mental health services

Riskonnect, a provider of integrated risk management solutions owned by TA Associates, acquired Ventiv Technology, a provider of risk management and underwriting technology solutions, from Tailwind Capital.

Sovos, a tax software provider backed by Hg and TA Associates, has acquired payroll forms solutions provider Aatrix Software.

TCV is considering a buyout offer for Believe, a French music distribution platform, per Reuters.

7-Eleven has acquired 204 convenience stores in Texas, New Mexico, and Oklahoma from Sunoco (NYSE: SUN) for approximately $1 billion.

EchoStar (Nasdaq: SATS) is evaluating strategic alternatives for its EchoStar Wireless Holding subsidiary, including a sale or strategic partnership.

Tier Mobility and Dott have agreed to merge, combining their respective EU-based electric scooter operations.


Circle, a cryptocurrency stablecoin provider, confidentially filed for IPO. Existing backers include General Catalyst, Goldman Sachs, BlackRock, Fidelity, and Marshall Wace, among others.

Lion Air is considering a local IPO that could raise up to $500 million, per Bloomberg.


CCMP Growth Advisors invested in refrigeration systems installer Innovative Refrigeration Systems.

Picnic, a Dutch online supermarket and delivery provider, raised €355 million from Edeka, the Bill & Melinda Gates Foundation Trust, and Dutch family offices.

D-Orbit, a space logistics and in-space transportation provider, raised €100 million in Series C funding led by Marubeni, with participation from Avantgarde, CDP Venture Capital, Seraphim, United, Indaco, Neva, and Primo.

Finn, a car subscription platform, raised $110 million in Series C funding. Planet First Partners led, with participation from HV Capital, Korelya Capital, UVC Partners, White Star Capital, and Picus Capital.

1X Technologies, a Norway-based developer of robotic avatars and androids, raised $100 million from EQT Ventures, Samsung NEXT, Nistad Group, and Sandwater.

Harbor Health, a Texas-based primary care and specialty clinic group, raised $95.5 million in new funding led by General Catalyst, with participation from Alta Partners, 8VC, and existing investors Health 2047 Capital Partners, Lemhi Ventures, and Martin Ventures.

Hyperexponential, an insurtech company specializing in property-casualty analytics, raised $73 million in Series B funding. Battery Ventures led, with participation from Andreessen Horowitz and Highland Europe.

120Water, a provider of cloud-based water compliance management systems, raised $43 million in new funding led by Edison Partners, with participation from Allos Ventures.

Artisight, a smart hospital platform that offers a combination of AI tools and physical sensors, raised $42 million in Series B funding from backers including Nvidia.

Cactos, a developer of smart energy storage systems, raised over €26 million in new funding led by OP Finland Infrastructure and the Finnish Climate Fund.

Requity, a rent-to-own housing startup, raised $26 million in new funding from Highline Beta, Sam Sun, Archangel Adrenaline Fund, and existing backers Boardwalk Investment and Conconi Growth Partners.

FlutterFlow, a no-code mobile app development platform, raised $25.5 million in Series A funding. GV led, with participation from Gradient Ventures, Xoogler Ventures, and Y Combinator.

Neocis, a developer of robot-assisted dental implant surgical systems, raised $20 million in new funding from NVentures and Mirae Asset.

Sway, a provider of tech-enabled delivery and returns solutions, raised $19.5 million in Series A funding. 7GC led, with participation from Blackhorn Ventures, Lightshed Ventures, and Rise of the Rest.

Finoa, a Berlin-based crypto custody and staking platform, raised $15 million in new funding. Maven 11 Capital and Balderton Capital co-led, with participation from Blue Bay Ventures, Signature Ventures, Coparion, and Venture Stars.

Rune Labs, a developer of precision neurology software and data analytics, raised $12 million in a Series A extension led by Nexus NeuroTech Ventures, per Axios.

Unbox, a Belgian fintech providing closed-loop platforms for asset distribution, raised €12 million in Series A funding from HSBC Asset Management and SFPIM.

KlariVis, a data analytics solution for community banks and credit unions, raised $11 million in Series B funding led by Blueprint Equity.

WaveBL, a digital platform for transferring trade documents, raised an $11 million Series B extension. NewRoad Capital Partners led the initial Series B round.

SQIM, an Italian biotech developing mycelium-based alternatives across fashion and automotive, raised €11 million in Series A funding led by CDP Venture Capital and co-led by European Circular Bioeconomy Fund (ECBF VC), with participation from Kering Ventures and Progress Tech Transfer.

Grip Invest, an Indian direct-to-consumer alternative investment platform, raised $10 million in Series B funding. Stride Ventures led, with participation from LC Nueva, Multiply Ventures, and existing backers Venture Highway, Anicut Capital, and AdvantEdge.

GolfForever, a developer of digital and physical golf fitness systems, raised $10 million in Series A funding led by Clerisy, with participation from brand ambassadors Scottie Scheffler and Tom Kim.

Dispatch, a wealthtech developer focused on client data synchronization and management solutions, raised $8 million in seed funding. F-Prime Capital led, with participation from Ritholtz Wealth, CoFound Partners, and Flyover Capital, among others.

Rivero, a Swiss fintech specializing in payment process automation, raised $7 million in Series A funding led by 6 Degrees Capital and Inference Partners, with participation from Kraken Ventures, Seed X Liechtenstein, PostFinance

Pontem, a Web3 startup developing Move Virtual Machine (VM) products on EVM-compatible blockchains, raised $6 million. Lightspeed Venture Partners led, with participation from Aptos Foundation, Pantera Capital, Kraken Ventures, and Lightspeed Faction.

Resynergi, a provider of plastic recycling technology, raised $6.4 million in Series B funding. Transitions First and Lummus Technology co-led.

Umoja, a startup developing decentralized finance altering risk hedging strategies, raised $2 million from Quantstamp, Blockchain Founders Fund, and Orange Dao, among others.

Evify, an Indian electric vehicle logistics startup, raised $1.3 million in pre-Series A funding led by GVFL and Piper Serica Angel Fund, with participation from We Founder Circle, IVY Growth, and angel investors.


BDT & MSD Partners raised $14 billion for its fourth fund.

Carlyle Group raised more than $600 million for a new fund focused on origination of collateralized loan obligations.

Vintage Investment Partners raised $200 million for its latest growth equity fund.

TPG provided initial backing to Visualize Group, a new private investment firm led by former Blackstone TacOps managing director C.C. Melvin Ike.


1. The story behind Houston’s ascendancy as a restructuring venue of choice.

• How the now-disgraced David Jones made the Southern District of Texas the place to be for bankruptcy filings and where it all went wrong. — The Story of Judge Jones, the Judge who Made Restructuring Cool Again, Pari Passu


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