Case Study #4

Why Family & Management Owners Choose Heartwood

Lone Star Beef






Fund I


San Angelo, TX



Company Overview

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.


Why Heartwood Partners?

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 Added Value

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.