Butterfly Equity’s recent acquisition of ePac Flexible Packaging underscores its strategy of investing in food and beverage’s fastest-growing categories.

As digitally printed flexibles gain share across the packaging market, ePac’s long-held reputation as an industry leader made it a compelling investment for Butterfly, said Vishal Patel, partner at Butterfly.

The sponsor first began exploring platform acquisition opportunities in packaging three to four years ago, Patel said, with ePac later emerging as an ideal target as the firm identified a trend towards flexible packaging. His team then learned that the company was preparing to run a formal process.

“The more time we spent with the company and the team, the more we appreciated their growth mindset and how it aligned with what we were looking to do,” said Patel. “The team at ePac is almost synonymous with the digitally printed flexible market – they were pioneers in the space a decade ago when this market was developed.”

Founded in 2016, Austin, Texas-based ePac is the world’s largest networked flexible packaging provider and operates a tech-enabled platform with 14 facilities in the US and Canada, according to a press release.

After identifying ePac as an acquisition target, Butterfly hired William Blair as its buyside advisor, Patel said, noting that the bank helped in underwriting the investment thesis for the company.

ePac conducted a broad sale process, Patel said, with the company announcing the deal with Butterfly in mid-January. Baird advised ePac on the transaction.

Butterfly is an ideal partner for ePac, given its relationships with middle-market food and beverage brands – the primary growth market ePac has long targeted, Patel said.

“We understand their customers in a way that many other sponsors that are focusing on packaging don’t quite understand,” said Patel.

Fund strategy

Butterfly is a middle-market, food-focused financial sponsor and invested in ePac through its Fund II, which closed in August 2022 on USD 1bn. Patel noted that Fund II is in the latter stages of deployment but still has runway for a few more deals.

The sponsor looks for category leaders in growth segments while avoiding structural headwinds and will occasionally co-invest in larger opportunities outside of its usual target range, Patel said.

“We generally want to have the tailwind of what themes are carrying the market, whether that’s protein consumption, cleaner ingredients, or a focus on premiumization,” said Patel. “Where we invest across that value chain depends on where we see the best value opportunity.”

In August 2025, Butterfly closed a USD 527m single-asset continuation fund for its portfolio company Qdoba, a Mexican fast-casual franchisor in North America with over 800 locations and approaching USD 1.3bn in systemwide sales. The firm also acquired kombucha tea maker Health-Ade in July 2025 through its portfolio company Generous Brands.

The firm has USD 6.1bn AUM, according to a public filing. Patel declined to disclose how much Butterfly invested into ePac but noted that it was a “squarely middle-market opportunity.”

Growth plans

Given ePac’s position as a high‑growth leader in digitally printed flexible packaging, Butterfly’s focus will be to support and accelerate its growth, Patel said.

The financial sponsor aims to enhance ePac’s commercial strategy and operations by finding repeat small and medium-sized customers and driving efficiency in manufacturing, allowing it to reinvest in more customer-facing facets of the company’s business, Patel said.

Butterfly is opportunistically looking for add-ons within this new packaging platform as private packaging is a “pretty fragmented landscape,” Patel said.

“There’s an opportunity to build this platform through M&A, but it’s not necessarily critical to our investment thesis,” said Patel. “We’re excited about the organic story, but opportunistically, when there are some great fits to add to this business, we’d be excited to do it.”

Around half of the opportunities Butterfly typically looks at are B2B businesses, he added.

Butterfly is aiming to solidify ePac’s leadership role in the digitally printed flexible packaging market within the next five years, Patel said.

“Digitally printed labels were a newer entrant, and they’ve become a very big part of that market. We see the same opportunity for us to be the leader in what is increasingly a bigger part of the category we compete in.”

Growing appetite

In addition to its established reputation as a flexible‑packaging leader, ePac attracted Butterfly’s interest because its customer base is heavily concentrated in middle-market and emerging market brands focused on healthier, premium foods, categories that are driving the growth in the food and beverage sector, Patel said.

For example, Butterly does not view protein as a fleeting trend, but as a long-term shift towards conscious calorie consumption and consumer’s desire to embrace better eating habits.

“The food ecosystem has grown significantly because of general consumer trends and the awareness of the importance of food and people’s health,” said Patel. “People need to eat regularly, but they care about what they eat, and that’s driving a lot of demand for premium and nutritious food.”

As it invests in both branded goods companies and their suppliers, Butterfly’s knowledge across the value chain helps it become better partners for its portfolio companies, Patel said.

Aside from packaging, Patel said his group will continue to look for investments in its three primary verticals of production inputs: industrial or manufacturing companies; business services such as distribution, food safety, software and data; and branded goods such as franchised restaurants and traditional consumer packaged goods, Patel said.

“We’ll continue to find great brands to invest in, but we also love the companies that make those brands successful behind the scenes, and ePac is a great example of that,” Patel said.