Andrew Lefkowitz has found great satisfaction in using his dealmaking skills to maximize the potential of companies that can help people lead better lives.
He partnered with scientist Sean Farmer to found Ganeden, a Mayfield Heights-based company that researched and commercialized beneficial probiotic strains as human health ingredients.
“That business took two different directions,” Lefkowitz says. “First, we built a line of probiotics that sold in basically every food, drug and mass retailer in the United States from Walgreens to Walmart. We built up that segment and then sold it to Texas Pacific Group. Then we pivoted and went into becoming a B2B ingredients supplier to food and beverage companies and companion animal companies.”
Ganeden found success once again, becoming the de facto supplier of probiotics outside of yogurt to almost every food and beverage company that sought to have a probiotic in its products. Its reach spanned more than 800 products in 60 countries, selling to portfolio companies of Coke, Pepsi, Nestle and Mondelez International.
In 2017, Ganeden was sold to Ireland’s Kerry Group for nearly 24 times EBITDA and 7.7 times revenue, Lefkowitz says. He and Farmer are now exploring new opportunities at Solon-based Locus Fermentation Solutions.
While the work is multifaceted, the overarching strategy for Lefkowitz remains quite simple.
“We’re just going to keep building and selling businesses,” he says.
Locus FS seeks to build businesses in a number of different industries.
“The core technology is our ability to manufacture for microorganisms that are very unique and at very high concentrations as opposed to the competition,” Lefkowitz says. “When we were at Ganeden, we were providing organisms that help people with irritable bowel syndrome, lactose intolerance, Crohn's, colitis and other challenges. We used to get dozens, maybe hundreds, of letters from people telling us we changed their lives. There is a certain satisfaction from providing products that really help people.”
He considers one of the keys to his success to be his willingness to delegate responsibilities.
“Some entrepreneurs, some dealmakers like to do things themselves,” says Lefkowitz, who serves as chairman and CEO of Locus FS. “I like to have partners, employees and people around me that do things that I'm not good at. We have 20 scientists working for us and we find the best possible scientists we can find. I have an accounting degree, but I have a great CFO. I understand people, but I have someone who runs HR. So I think putting the right people around you is really important.”
The next step is raising money. Lefkowitz has raised more than $50 million in capital between Ganeden and Locus FS.
“You have to be able to raise money,” he says. “You can't be a CEO in a business that grows as quickly and gets to as big as the businesses that we've built and are building and not be able to raise money. We've been able to inspire trust from investors that we are working hard and doing the right things with their funds.”
If you do it right, this process should get easier as time goes on.
“The more success you have, the easier it is to raise money,” Lefkowitz says. “The more success you have, the more people want to come work for you. Those challenges theoretically diminish as time goes on.
The challenge that gets more difficult is focus, he says.
“You start seeing all these different opportunities and people bring ideas to you and some of them are really stunning. But you can't do everything. It is something that we as a company and I as a CEO struggle with, which is to focus on delivering results that are meaningful, given available time and money.”
Through his willingness to seek out help from others, Lefkowitz is finding ways to get more done.
“We started an oil business [Locus Bio-Energy Solutions] and I hired a superstar CEO from Houston to run our oil business,” Lefkowitz says. “We have an agriculture business [Locus Agricultural Solutions] where we're treating more than two dozen crops on 40,000 acres. So I hired a guy with 35 years of experience in the ag business and he's built a team in San Diego with almost 40 people around the U.S. working for him. If I decide we're going to get after something, I just go find someone who's great and say, ‘OK, get after it. I'm not going to micromanage you. Build the business.’”