Arbor Wins IVCA Portfolio Company of the Year Award
Illinois Venture Capital Association
CHICAGO – The IVCA has announced that its Buyout Portfolio Company of the Year is Great Kitchens. The award recognizes a buyout company that was venture capital or private equity-backed, and has achieved outstanding success. Great Kitchens is the leading supplier of pizza and appetizers with a focus on the deli section of North American retail grocery stores. The company is the largest take-and-bake pizza manufacturer in the United States.
Nominated By: Saul Rudo, Partner, Law Firm of Katten Muchin Rosenman LLP
IVCA: What was the prime motivation for you to nominate Great Kitchens as the Buyout Portfolio Company of the Year? What has impressed you most about how they have operated their business and how they have returned on investment?
Saul Rudo: Great Kitchens was a tremendous success for Arbor Investments. The value of Great Kitchens expanded considerably on multiple fronts under Arbor’s ownership. Revenue and EBITDA grew four-fold and eight-fold, respectively. Experienced management was installed and augmented as growth accelerated. Sales efforts were refocused to the area of greatest opportunity, which was take-and-bake pizza, a double-digit growth category that Great Kitchens came to dominate. In June of 2010, Arbor sold Great Kitchens for $180 million to ARYZTA AG, a Swiss food company based in Zurich. The transaction generated an IRR of 69% and produced 17 times the original investment.
IVCA: With job creation such a hot topic at this time, how has Great Kitchens contributed to job growth in the Midwest and overall?
Rudo: When Arbor acquired Great Kitchens, the company had 233 employees. Arbor invested $30 million in a new manufacturing facility in Romeoville, Illinois, and by mid-2010 their work-force had nearly tripled, to 670 employees.
IVCA: Many of the recent innovations of the last twenty years have been in the food industry. What is distinctive about Great Kitchens that makes it an innovation leader?
Rudo: Great Kitchens took the concept of take-and-bake pizza to an entirely new level. In 2004, only frozen pizza was sold at retail. That same year, Great Kitchens introduced take-and-bake pizza at the retail grocery level, providing a high quality refrigerated pizza that could be conveniently baked at home in minutes. Great Kitchens’ take-and-bake pizza offers an exceptional value to the consumer, effectively serving a hot meal for a family of five for less than $8. Due to their innovation, quality and efficiencies, Great Kitchens became the industry leader in that pizza category.
IVCA: What trends, products or services in the food industry will Great Kitchens be exploring in the future?
Rudo: Take-and-bake pizza continues to be a growth category for Great Kitchens. They constantly reinvent their product line to stay ahead of the competition. In addition, they will be exploring ready-to-eat sandwiches that can be sold through their existing customer base.