Why Family & Management Owners Choose Heartwood

Lone Star Beef Processors is a processor of grass-fed cows and bulls, primarily for the ground beef markets, selling to further processors who serve fast food restaurants, retail grocery stores, and other institutional markets.

The owner-managers of Lone Star were seeking an investor to help them diversify their wealth while partnering with them to complete a meaningful capacity expansion and continue to develop and expand the business.  They were attracted to Heartwood Partners’ lower-debt, cash-yielding investment model as it was very similar to how they had managed the business and provided a strong base from which to pursue the capacity expansion.  The owners were also attracted to Heartwood Partners’ willingness to consider a longer holding period. The owner-managers all reinvested a meaningful portion of their proceeds in the equity alongside Heartwood Partners.

Heartwood Partners supported management in completing investments in equipment and facilities that expanded capacity by 50%.  They also worked with the CEO to develop and implement a succession plan for the company and create a new equity incentive plan for the other senior executives. To further support management, Heartwood Partners added an experienced protein executive to the Board. During Heartwood Partners’ nine-year investment period, Lone Star took advantage of its expanded capacity and ability to fluidly work within the beef commodity markets (as a result of its lower-debt capital structure) to meaningfully grow on an organic basis.