Wind Point Partners will merge two of its portfolio companies – Hearthside Food Solutions and Ryt-way Industries, to create a contract food manufacturer with over $1 billion in sales and 19 manufacturing facilities across seven states.
Wind Point acquired Hearthside in April 2009 and Ryt-way in August 2008. Since being acquired by Wind Point, both Hearthside and Ryt-way have completed three add-on acquisitions that have diversified each company’s customer base and product portfolio.
Hearthside is an independent bakery and a contract manufacturer of grain-based food and snack products. Hearthside operates 12 food manufacturing facilities in five states and is headquartered in Downers Grove, a suburb of Chicago (www.hearthsidefoods.com).
Ryt-way is a provider of dry-food contract manufacturing to food and consumer products companies. Through its Ryt-way Equipment Group the company also provides packaging equipment installation services to food and beverage companies. Ryt-way operates seven production facilities across four states and is headquartered in Lakeville, a suburb of Minneapolis (www.rytway.com).
Rich Scalise, CEO of Hearthside Food Solutions, will assume the role of CEO for the combined business. Mr. Scalise is a 35-year veteran of the food industry who most recently served as President of Ralcorp Frozen Bakery Products, a division of Ralcorp Holdings (NYSE:RAH). He previously spent 18 years with ConAgra Foods in a number of roles including his last position as President and COO of ConAgra’s $3 billion Refrigerated Foods Division.
“Hearthside and Ryt-way have a complementary customer base and supply chain capabilities. The combined company will be not only significantly larger but also able to deliver a wider array of services,” said Mr. Scalise.
Wind Point Partners invests from $20 million to $70 million of equity in companies with revenues from $100 million to $500 million and EBITDAs of at least $8 million. Industries of interest include business services, consumer products, healthcare and industrial products. The firm has approximately $2.5 billion in capital under management and has completed more than 90 investments and 161 add-on acquisitions across its seven private equity funds. Wind Point Partners is based in Chicago (www.wppartners.com).
“This is a great opportunity for our customers. By offering a broader suite of capabilities, Hearthside and Ryt-way will become a one-stop shop for contract manufacturing,” said David Finch, CEO of Ryt-way.
“Rich and David have done an excellent job driving strong revenue growth, commercializing new products and completing accretive acquisitions at Hearthside and Ryt-way,” said Mark Burgett, a managing director at Wind Point. “By combining two industry leaders, we are able to create significant growth opportunities for the business in addition to value for our investors. Given the similarities between the businesses, we expect to start realizing benefits immediately.”
© 2013 PEPD • Private Equity’s Leading News Magazine • 5-15-13
