Arbor Investment buys pizza biz
For Immediate Release
Chicago equity firm Arbor Private Investment Co. LP acquired Cousins Foods Ltd., a frozen pizza and appetizer manufacturer based in Addison for an undisclosed sum.
Cousins, which has been renamed Great Kitchens Inc., develops custom frozen foods for supermarkets and club stores to sell under private labels. One of the five largest producers of private-label pizza, the company had sales of $22 million in 2001, according to a 2002 report by HighBeam Research LLC. Revenues grew 70% in 2003, says Great Kitchens executive vice-president Dan Schoen, though he declines to provide a figure.
Great Kitchens won’t disclose the supermarkets and retailers that sell the company’s pizza and appetizers, but Mr. Schoen predicts 30% sales growth from new and existing customers this year. Arbor says annual U.S. sales of frozen pizza reached $2.8 billion in 2003, while sales of private-label frozen pizza grew 15%. Arbor invests exclusively in food and beverage companies, with $42 million in funding from undisclosed institutional investors and the ability to co-invest an additional $18 million to $33 million with its limited partners. The firm has nine professionals in its Chicago and Atlanta offices, as well as about 1,000 employees at the six food and beverage companies it owns. Great Kitchens is the firm’s first acquisition in the Chicago area.
“This is a dynamic, fast-growing business that has a clear shot to potentially double or triple in size,” says Gregory Purcell, managing partner at Arbor. With the injection of capital, “you’ll see us make more investments in the plant and in the people, building more infrastructure to handle larger accounts and also continue to work closely with customers to tailor food products to meet their demands,” he says.
In the next year, Great Kitchens will double its plant size from 40,000 to 85,000 square feet, add a new research and development facility and hire new employees, Mr. Schoen says. “We like their vision,” he says of Arbor. “They’re food and beverage specialists. There is no question it’s important to help us grow at the pace we’re growing.”
As part of the deal, Arbor operating partner Dennis Malchow was named president of Great Kitchens. Mr. Malchow was previously CEO of Martin-Brower Co. LLC, a $3 billion foodservice business based in Rosemont.
For more information, please contact Gregory Purcell (312-981-3780) or Joseph Campolo (312-981-3781).