A new owner for Hearthside Food
Goldman Sachs and Vestar Capital Partners have agreed to sell Hearthside Food Solutions to an investment partnership headed by Charlesbank Capital Partners and Partners partnership. With its headquarters located in Downers Grove, Illinois, Hearthside is the biggest independently owned bakery in the country. It operates 25 manufacturing facilities throughout the US and Europe and offers a wide range of nutrition bars, cookies, cereals, baked goods, and snacks.The transaction’s financial details were kept a secret.
Charlesbank and Partners Group stated that they will work with Hearthside’s management team on several value-creation projects after the deal is completed. A greater emphasis on fostering organic growth through offering clients a greater selection of product solutions, carrying out strategic bolt-on acquisitions to extend the company’s reach into neighboring markets and industries, and streamlining current production procedures are some of their ambitions.
Through the integration of adaptability, creativity, quality, and size, we have realized our goal of making Hearthside one of the top and fastest-growing businesses in the foodindustry,” stated Rich Scalise, Hearthside’s co-founder, chairman, and CEO. “We would like to thank Goldman and Vestar for their invaluable partnership over the last few years, and we are delighted to welcome Partners Group and Charlesbank as partners for the next chapter of our success story today.”
The managing director of Partners Group’s private equity Americas, Chris Russell, praised Mr. Scalise for his abilities to spearhead Hearthside’s expansion into food contract manufacturing.
“Given that global transformative trends, like increased outsourcing, are supporting the company’s business model and show no signs of flagging,” Mr. Russell stated, “we see strong potential for the company to continue on its growth path.” “We’re excited to collaborate with Rich and the entire Hearthside team.”
Hearthside may be for sale began to take shape in January when a Bloomberg story indicated that a sale might bring in about $2.5 billion.In 2014, Hearthside was purchased by Goldman Sachs and Vestar for around $1.1 billion from Wind Point Partners.
Mr. Scalise stated, “Our relationship with Vestar and Goldman Sachs was exceptional.” “Trust, growth, and strategic direction were all made possible by their relationship. With Partners Group and Charlesbank, we are eager to advance those enablers as we search for newto enter and to keep putting our clients first in everything we do.
Hearthside is “an exceptional food platform,” according to Nicole Agnew of Goldman Sachs, who also expressed gratitude to the company for its assistance in expanding Hearthside into Europe and other high-growth areas. Vestar’s managing director, Brian O’Connor, stated that Hearthside’s expansion in the last four years “exceeded our expectations.”
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Mr. O’Connor stated, “Together, we targeted acquisitions that expanded into Europe, entered new categories, and complemented Hearthside’s capabilities.” “We are optimistic that Hearthside will thrive under Partners Group and Charlesbank going forward.”
Since its founding in 2009, Hearthside has expanded during the previous eight years. With the support of Chicago-based private equity firm Wind Point Partners, Hearthside purchased a significant amount of the assets from Grand Rapids, Michigan-based Roskam Baking Co. Then, in May 2010, Golden Temple, Eugene, Ore., and Consolidated Biscuit Co., with headquarters in McComb, Ohio, were acquired by Hearthside. Hearthside purchased the privately held company Oak State Products.
In late 2016 and more recently, on Nov. 28, 2017, the Nashville, Tennessee-based Standard Functional Foods Group Inc. (SFFGI), a producer of cookies, bars, and other baked goods, was fully acquired.
Hearthside now runs 25 production facilities, 11 of which are equipped to produce bars, following the close of the SFFGI deal. Europe is home to three of the company’s production sites.
Charlesbank funds Partners is a middle-market private equity investment firm with offices in Boston and New York that oversees funds worth over $5 billion. In the past, the company has made investments in Peacock Foods, Aurora Organic Dairy, Del Taco, and Papa Murphy’s.
Partners Group, a global private markets investment management company with its headquarters located in Zug, is managing investment programs worth over $74 billion in private equity,private debt, private real estate, and private infrastructure. The company works with institutional investors worldwide, managing a variety of tailored portfolios.