Peak Rock Capital has signed an agreement to acquire Diamond Crystal Brands, a manufacturer and distributor of portion control and single serve food and beverage products, from publicly-traded Hormel Foods. The transaction should close by the end of the second quarter.
Diamond Crystal Brands (DCB) makes specialty food products that are sold to foodservice distributors, national restaurant chains and convenience stores. Products include side dishes; cold and hot beverage mixes; sugar packets and sticks; salt and pepper dispensers; creamer and sugar canisters; sauces and baking items; and non-dairy desserts. DCB operates seven SQF (a certification issued by the Safe Quality Food Institute) facilities and is headquartered in Savannah, GA (www.dcbrands.com).
Hormel Health Labs, which provides foods and beverages for individuals with special dietary needs, will be retained by Hormel and is not part of this transaction.
“DCB represents an exciting opportunity to invest in a leading middle market food and beverage company with a long-standing reputation for quality and service,” said Anthony DiSimone, Chief Executive Officer of Peak Rock Capital. “This transaction highlights Peak Rock’s ability to execute complex corporate carve-outs, where we can leverage the operational experience of our principals to effectuate a seamless company transition to a standalone entity, in order to further drive growth and operational improvements.”
The buy of DCB is the fourth recent food-related investment that Peak Rock has made. Peak Rock’s investments in the space include Natural American Foods, a producer of honey acquired in January 2014; Berner Food & Beverage, a manufacturer of dairy-based shelf-stable snacks and beverages acquired in December 2015; and Highline Mushrooms, a producer and distributor of mushrooms acquired in November 2014 and sold earlier this month to Dublin-based fruit company Fyffes.
“DCB’s product offerings, blue-chip customers, outstanding management team and strong reputation make this a highly compelling investment,” said Peter Leibman, Managing Director of Peak Rock Capital. “We believe that DCB represents an excellent platform for growth through near-term organic initiatives and strategic acquisitions.”
Peak Rock makes debt and equity investments of $20 million to $150 million in middle market companies with revenues from $50 million to $1 billion and enterprise values from $25 million to $500 million. Sectors of interest include business and commercial services; consumer; distribution and logistics; energy and related services; healthcare; industrials; manufacturing, metals, and media. The firm is based in Austin (www.peakrockcapital.com).
© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-28-16
