New York, N.Y. — With the aim of becoming the premier adviser to consumer goods companies in the healthy living and wellness space, investment banker William Hood has launched his own firm.
“The natural products industry is going to be a huge early focal area for us,” Hood told Whole Foods. “I’m passionate about natural products and passionate about the fundamental trends driving the growth in the industry. I really feel that larger firms are not equipped to effectively service the entrepreneurs and the growing companies within the industry.
“I’m looking to build relationships with entrepreneurs very early on and to be their partners, helping them with how to grow and shape their business so they are in the best position for an exit,” Hood added.
William Hood & Co. will function as a division within AXIA Capital Markets LLC (“ACM”), a U.S. registered broker-dealer and member of FINRA, and wholly owned subsidiary of European Investment Bank AXIA Ventures Group Ltd (“AVG”). ACM will serve as its partner for private equity and debt capital as well as public equity and debt service.
Hood sees no end to the relentless volume of mergers and acquisitions in the natural products space and intends to represent both buyers and sellers.
“The large food and beverage companies are struggling for growth with their traditional food businesses,” Hood said. “They are looking for growth companies to acquire. What wouldn’t have been interesting 10 or 15 years ago, they’re looking at earlier in the life cycle. It’s not just about the products. It’s about the competency.
“The larger companies are looking to communicate with millennials and a lot of the smaller companies are doing a good job at that,” Hood added.
Hood plans to staff his boutique firm with executives from the natural products industry who have experience with the inner workings of growing a brand and a company.
What about the argument that it’s impossible to keep the magic alive after a sale?
“There are examples of where it hasn’t gone well and examples of what was good,” he said.
At the time, people argued that Clorox overpaid for Burt’s Bees and “now they will tell you it’s their best brand. Ultimately, they were able to figure it out. I think the larger companies, the strategics, are getting better and better about understanding the unique magic that drives these companies and finding ways to preserve it.
“You can’t take advantage of revenue and cost synergies without some level of change,” he added. “I think that change happens when certain individuals who drive a certain culture and magic lead the businesses.
“It’s a very robust market for strategic assets,” he added. “Any well-established growing brand on trend now – organic, successfully targeting millennials — will get significant interest from the large growing strategic players. You’ll see very high multiples.”
Hood, who is a frequent industry speaker, will discuss how mergers and acquisitions have shaped the nutritional industry at SupplySide West later this month in Las Vegas.
Just a few of the nutritional companies Hood has dealt with in his 20-year investment banking career are Nature’s Bounty, Holland and Barrett, Reckitt-Benckiser, Abbott Health, Santa Cruz Nutrition and the Jameson Brand.
While offices will be on New York’s Fifth Avenue, “we’ll be spending a lot of time in places like California.”