Food-focused Arbor Investments sold ice-cream maker Fieldbrook Foods Inc., wrapping up investments out of its second fund.

The private-equity firm unloaded Fieldbrook to family-owned ice-cream manufacturer Wells Enterprises Inc. after taking a controlling stake in the company roughly nine years ago. The sale disposes of Arbor’s last investment through Arbor Fund II.

The fund, raised in 2006, generated a 2.5-times net return on invested capital and a 19.5% net internal rate of return, Arbor said in a news release.

Under Arbor, Fieldbrook’s revenue grew by nearly 70% and the company acquired Mister Cookie Face and Washburn’s Dairy. Last year, Fieldbrook brought in industry veteran Robin Galloway as chief executive. Ms. Galloway previously worked at Schwan’s Shared Services LLC, Wells Enterprises and Dean Foods Co.

Founded in 1914, Fieldbrook is a private-label and co-manufacturer of ice cream and other frozen treats such as ice-cream sandwiches, cups and cones. It operates 30 production lines and can make 25 million gallons of ice cream a year, along with 120 million frozen treats.

With the sale to Le Mars, Iowa-based Wells, the Dunkirk, N.Y., manufacturer joins a company that produces Blue Bunny and Bomb Pop brands, as well as Chilly Cow and Blue Ribbon Classics.

Private-label and co-manufacturing businesses are becoming popular among private-equity firms. They tend to garner lower multiples than branded products, offering acquirers a more economic route toward fast-growing end-markets. As consumer-products conglomerates increasingly seek to outsource manufacturing, they have fueled growth for private-label and co-manufacturers.

Arbor, which has offices in New York and Chicago, specializes in backing food-and-beverage companies at the middle-market level. Its investments focus on brands, manufacturers, distributors and marketers. Arbor’s portfolio includes deli meat maker Columbus Manufacturing Inc. and Artisanal Brewing Ventures, whose brands include Sixpoint Brewery and Southern Tier Brewing Co.

Houlihan Lokey provided financial advice to Arbor, which received legal counsel from Kirkland & Ellis LLP. Wells was advised by UBS Investment Bank and McDermott Will & Emery.

By Jaewon Kang

https://www.wsj.com/articles/arbor-unloads-ice-cream-maker-fieldbrook-foods-11555441625