Arbor Private Investment Recaps Frozen Pizza Market
For Immediate Release
Buyout firm Arbor Private Investment, which focuses on the food and beverage industries, said it has led a recapitalization of Cousins Foods Ltd.
The deal was all cash, but terms weren’t disclosed. Cousins, Addison, Ill., is a private-label producer of frozen pizzas, Arbor said. It employs more than 500 people and has dozens of customers, including grocery chains, club stores, and foodservice distributors.
“We couldn’t be more excited to own it,” said Gregory Purcell, Arbor’s managing partner. Arbor, Chicago, acquired a majority stake in Cousins from its owner, Wayne Williams, who retains a minority share. Cousin’s management also owns a minority stake, Purcell said, declining to give more details.
The company will be renamed Great Kitchens Inc., with Purcell as chairman and chief executive and Dennis Malchow, an Arbor operating partner, as president.
The acquisition was “strategic” for Arbor, Purcell said, with the frozen food market driven by increasing consumer demand for convenient food. About 3 billion pizzas are being sold in the U.S. every year, generating sales of more than $32 billion, Arbor said. Private-label frozen pizza outpaced the overall category with 15% annual growth in sales and 17% unit growth.
Arbor already has five portfolio companies: Mexican Accent Inc., which makes tortillas, tortilla chips, and other Mexican food; Nordon Inc., which distributes foodservice equipment; Northern Neck Coca-Cola Bottling Inc.; ISI Commercial Refrigeration LP, which distributes refrigerated food equipment; and Cooler Solutions Inc., another foodservice equipment distributor.
Arbor made the investments from its debut fund, Arbor Private Investment Co. L.P., a $42 million fund that closed in 2001. The fund is almost half invested, Purcell said, noting that Arbor could start raising a new fund in late 2005.
The company has exited from four earlier investments, which weren’t made from the fund. These include Ultra Products Co., a dairy product maker; The Martin-Brower Co., a distributor of frozen, refrigerated, dairy and dry food to McDonald’s; J.L DeGraffenreid and Sons LLC, a pickle and relish processor; and Dale and Gage Foods, a food packaging company.
Purcell said the returns from the four investments have been “positive,” and that “our LPs are pleased with our returns.” He declined to be specific.
Arbor’s investors include financial service companies and individuals. The firm invests in companies with annual revenues of $40 million to $100 million.
For more information, please contact Gregory Purcell (312-981-3780) or Joseph Campolo (312-981-3781).