Arbor Investments (“Arbor”), a specialized private equity firm that focuses exclusively on investing in food, beverage, and related industries announced today the sale of Fund III portfolio company DPI Specialty Foods (“DPI” or the “Company”) to KeHE Distributors (“KeHE”).

Founded in 1963 and headquartered in Ontario, California, DPI is a premier distributor of specialty foods and a provider of customized sales, marketing and logistical solutions to strategic blue-chip grocery retailers across the western United States. With over 1,100 employees and 40,000 SKUs, the Company distributes gourmet, specialty, and better-for-you foods across ambient, refrigerated, and frozen temperature zones.

Arbor acquired DPI in late 2015, admiring the Company’s focus on specialty foods and sterling reputation for customer service. With increased consumer interest in gourmet, specialty, gluten-free, kosher, organic, local, and ethnic products, Arbor recognized the value of DPI’s diverse array of national and international brands in these fast-growing, on-trend specialty foods categories.

Throughout Arbor’s stewardship, DPI continuously evolved as a company. By exiting non-core operations and vertically integrating systems, products, and people, the Company was able to focus exclusively on providing full service, end-to-end solutions for grocers primarily located on the West Coast. DPI’s deep industry expertise and know-how in perishable and perimeter store categories, combined with dedicated associates, made DPI an attractive asset for KeHE.

“Arbor is very pleased we found the right partner for DPI,” said Dennis Malchow, DPI Board member and former Arbor Senior Operating Partner. “We’re gratified our associates are joining the KeHE family – an organization that values their associates and prioritizes serving the customer. No doubt these two quality companies will establish a platform for future growth.”

DPI Chief Executive Officer Russ Blake was aligned with the Arbor vision for DPI from the start. “Arbor saw the same opportunity we saw – to make a high-conviction bet on the West Coast distribution of specialty foods.” Blake added, “By narrowing our organization’s target, we were able to optimize operations and focus on what we do best, servicing our grocery retail partners. As a result, we deepened relationships with key customers by offering valuable programs, product categories, and services, grew the core business, and ultimately created a platform that attracted a well-respected buyer.”

Arbor co-founder and CEO Gregory Purcell concluded, “Our investment thesis and efforts at DPI generated a fantastic return, supplementing an already exceptional Arbor Fund III.”

Moelis & Company acted as exclusive financial advisor to DPI. Additionally, Moelis and Harris Williams served as financial advisors to Arbor on the transaction. Winston & Strawn served as DPI’s legal counsel.