Charlesbank and Partners Group to Buy Hearthside
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Charlesbank and Partners Group to Buy Hearthside

Charlesbank Capital Partners and Partners Group have agreed to acquire Hearthside Food Solutions, the largest independent bakery in the US, from Goldman Sachs and Vestar Capital Partners which acquired the company in April 2014 from Wind Point Partners.

Hearthside Food Solutions is the nation’s largest independent bakery and a full-service contract manufacturer of grain-based food and snack products. Hearthside, led by CEO Rich Scalise, operates 25 food manufacturing facilities across the US and Europe and is headquartered in the Chicago suburb of Downers Grove (www.hearthsidefoods.com).

Wind Point formed Hearthside in April 2009 in partnership with Mr. Scalise, whose previous experience included serving as President of Ralcorp Frozen Bakery Products. He also spent 18 years with ConAgra Foods in a variety of roles including as President and COO of ConAgra’s $3 billion Refrigerated Foods Division.

Following the close of the acquisition, Partners Group and Charlesbank will work with Hearthside’s management team, led by Mr. Scalise, on a number of value creation initiatives including new product development, pursuing add-on acquisitions to expand the business into adjacent industries and geographies, and manufacturing improvements.

“We are thrilled to partner with Rich and his team as they embark on the next chapter of Hearthside’s growth,” said Ryan Carroll, a Managing Director at Charlesbank. “The track record they’ve established since founding the company in 2009 is truly impressive. Further, we know from our extensive experience in the industry that Hearthside has a reputation for providing the highest levels of service and quality to its customers, many of whom have worked with the company for years. We look forward to building on this legacy.”

“By combining flexibility and innovation with quality and scale, we have been able to achieve our vision of transforming Hearthside into one of the leading and fastest-growing companies in the food industry,” said Mr. Scalise. “Today, we are delighted to be welcoming Partners Group and Charlesbank as partners for the next chapter of our success story and would like to thank Goldman and Vestar for their valuable partnership over the last few years.”

Charlesbank invests in management-led buyouts and growth capital financings in companies with enterprise values of $150 million to $1.5 billion. In October 2017, the firm held a final closing of Charlesbank Equity Fund IX at its hard cap of $2.75 billion. Charlesbank will invest between $50 million and $250 million in each Fund IX portfolio company and will also make opportunistic credit investments. Sectors of interest include consumer, industrial, industrial services and distribution, TMT and business services. The firm has offices in Boston and New York (www.charlesbank.com).

“Under Rich Scalise’s leadership, Hearthside has revolutionized food contract manufacturing, bringing scale to the industry,” said Chris Russell, Managing Director, Private Equity Americas, Partners Group. “We see strong potential for the company to continue on its growth path as its business model is supported by global transformative trends, such as increased outsourcing, which show no signs of flagging.”

Partners Group is a global investment management firm with over $74 billion of assets under management in private equity, private real estate, private infrastructure and private debt. The firm is headquartered in Zug, Switzerland, and has over 950 employees across 19 offices around the globe (www.partnersgroup.com).

© 2018 Private Equity Professional | April 18, 2018

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