(Bloomberg) -- Hildred Capital Management is set to buy bankrupt baby brand Hello Bello after nobody bested the healthcare-focused private equity firm’s $65 million opening offer, according to court papers.

Hello Bello, best known for its sustainable diapers, filed for Chapter 11 protection less than two months ago. Actors Kristen Bell and Dax Shepard launched the Los Angeles-based company in 2019 alongside a deal to sell the products exclusively at Walmart Inc., according to a statement at the time. Today, its products are also sold at other retailers and online. 

Hildred plans to combine Hello Bello with Hyland’s Naturals, another portfolio company that sells supplements and over-the-counter medicine, under one umbrella parent company, according to people with knowledge of the plans. Hildred is set to hold Hello Bello in a newly launched continuation fund expected to close above $650 million, according to the people, who asked not to be named because the plans are private.

Previously: Celebrity-Backed Baby Brand Hello Bello Files for Bankruptcy

Hildred and Hello Bello declined to comment.  

High material and shipping costs hurt Hello Bello and were a major factor in its bankruptcy. It tried to mitigate those costs by building its own factory in Texas, but the cost savings didn’t emerge fast enough to prevent insolvency. Hildred plans to keep the Texas factory open, the people said. 

Hello Bello was originally backed by private equity firm VMG Partners. 

The bankruptcy case is Unconditional Love Inc., 23-11759, US Bankruptcy Court for the District of Delaware (Wilmington).

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