Chicago Shop Scores Best Return Yet On Pizza Co.
Buyouts Magazine
Arbor Investments LLC has scored a home run, selling Great Kitchens Inc., a company that makes take-home pizzas sold in grocery stores, to ARYZTA AG, a Zurich, Switzerland-based company. The sale price was $180 million.
The disposition netted the Chicago-based shop a 16.9x return on its invested equity, and a 66 percent internal rate of return, according to the firm. Arbor Investments bought the business in 2004, and credits much of its success to installing experienced management and to opening a new manufacturing facility in Romeoville, Ill., which cut costs and allowed for more efficient production.
One of Arbor Investments’s own operating partners, Dennis Malchow, a former CEO of the Martin-Brower Company, headed the firm as CEO; and in 2008, the firm brought on Jerry Coghlan, a former executive with Kraft, as president.
Arbor Investments is investing from Arbor Investments II, a $171 million pool raised in 2006. The firm, which raised $84 million for its first fund in 2001, invests exclusively in the food, beverage and related industries; it has a particular interest in food processing, manufacturing, food distribution, beverage bottling and distribution, packaging and product displays, housewares, private label products, and foodservice equipment. Great Kitchens marks the firm’s seventh exit across both funds.
The firm continues to hold three companies bought via Fund I that could be ripe for sale, considering the length of time it has owned them. They are Allied Specialty Foods, a Vineland, N.J.-based company acquired in 2005 that makes thinly sliced steak for Philly-style cheesesteak; Truco Enterprises LP, a Dallas-based distributor of tortilla chips, salsa and other Mexican food and beverage products (bought in 2004); and White Apron Inc., a Brea, Calif.-based company that sells beef, chicken and other meat products (acquired in 2005).
Gregory Purcell, a former senior vice president of mergers and acquisitions at food and beverage company Reyes Holdings LLC, co-founded the firm in 1999 alongside Joseph Campolo, who was a vice president of M&A at Reyes. In all, the firm has eight investment professionals and five operating partners.
By Bernard Vaughan