Key Takeaways
- • Butterfly Equity and Graham Partners LP have completed an investment in Custom Flavors, a San Clemente, California-based manufacturer of liquid and powdered flavors, with the company generating approximately $20 million in EBITDA.
- • Financial terms of the transaction were not disclosed; however, the deal follows an auction process run by Hexagon Capital Alliance LLC reported in June 2026.
- • Custom Flavors will retain CEO Alex Wendling, with co-founders Mike Wendling (now chairman) and Steve Bishop remaining involved; the company also appointed Scott Nadison as president, bringing executive experience from International Flavors & Fragrances Inc. (IFF) and Mother Murphy's Flavors.
- • The partnership will enable Custom Flavors to expand production capacity, accelerate lead times, build its team, and invest in facilities to serve a broader customer base across bakery, confectionery, snacks, supplements, beverages, and dairy applications.
- • Butterfly and Graham have established a flavor investment platform combining Custom Flavors with Target Flavors, a full-service flavor company serving beverage, dairy, pharmaceutical, and bakery industries, creating a scaled platform with national reach.
Summary
Butterfly Equity and Graham Partners LP have completed an investment in Custom Flavors, reinforcing private equity appetite for specialty food ingredients and flavor manufacturers. Custom Flavors, founded in 2005 and based in San Clemente, California, develops and manufactures custom liquid and powdered flavors for diverse end markets including bakery, confectionery, snack foods, supplements, beverages, and dairy products. The company generated approximately $20 million in EBITDA prior to the transaction. Neither firm disclosed specific financial terms in the partnership announcement dated July 22, 2026, though The Deal reported in June that Custom Flavors had engaged Hexagon Capital Alliance LLC to conduct an auction process.
The investment preserves continuity in company leadership. Alex Wendling, who assumed the CEO role in February 2026 after his father Mike Wendling transitioned out, will continue to lead the company with support from co-founders Mike Wendling (now chairman) and Steve Bishop. The firms also appointed Scott Nadison as president—a seasoned executive with previous roles as president and CEO of family-owned Mother Murphy's Flavors and president of sales at International Flavors & Fragrances Inc., one of the global leaders in flavors and fragrances.
The partnership provides Custom Flavors with capital and operational resources to accelerate growth. Butterfly and Graham committed to expanding the company's production capacity, investing in facilities upgrades, building team capabilities, and reducing lead times—positioning Custom Flavors to serve a broader customer base at scale. This capital infusion addresses operational constraints that had previously limited market reach.
Beyond the Custom Flavors investment, Butterfly and Graham launched a broader flavor investment platform by combining Custom Flavors with Target Flavors, a full-service flavor company serving the beverage, dairy, pharmaceutical, and bakery sectors. Graham had backed family-owned Target Flavors in November 2025. Together, the two companies form a consolidated platform with national production footprint and diversified end-market expertise, a structure typical of private equity consolidation plays in fragmented specialty ingredients sectors.
Butterfly Equity, based in Beverly Hills, focuses on food and beverage companies and related production, inputs, and business services firms. The firm's recent activity includes Rise Baking Co.'s acquisition of Jimmy's Gourmet Bakery in June 2026, demonstrating active deal flow in the specialty food sector.
The investment preserves continuity in company leadership. Alex Wendling, who assumed the CEO role in February 2026 after his father Mike Wendling transitioned out, will continue to lead the company with support from co-founders Mike Wendling (now chairman) and Steve Bishop. The firms also appointed Scott Nadison as president—a seasoned executive with previous roles as president and CEO of family-owned Mother Murphy's Flavors and president of sales at International Flavors & Fragrances Inc., one of the global leaders in flavors and fragrances.
The partnership provides Custom Flavors with capital and operational resources to accelerate growth. Butterfly and Graham committed to expanding the company's production capacity, investing in facilities upgrades, building team capabilities, and reducing lead times—positioning Custom Flavors to serve a broader customer base at scale. This capital infusion addresses operational constraints that had previously limited market reach.
Beyond the Custom Flavors investment, Butterfly and Graham launched a broader flavor investment platform by combining Custom Flavors with Target Flavors, a full-service flavor company serving the beverage, dairy, pharmaceutical, and bakery sectors. Graham had backed family-owned Target Flavors in November 2025. Together, the two companies form a consolidated platform with national production footprint and diversified end-market expertise, a structure typical of private equity consolidation plays in fragmented specialty ingredients sectors.
Butterfly Equity, based in Beverly Hills, focuses on food and beverage companies and related production, inputs, and business services firms. The firm's recent activity includes Rise Baking Co.'s acquisition of Jimmy's Gourmet Bakery in June 2026, demonstrating active deal flow in the specialty food sector.
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