Arbor Investments has sold Rise Baking to Olympus Partners. The sale of Rise Baking will result in a 7x gross return on Arbor’s Fund III investment.
Rise Baking is a manufacturer of cookies, dessert bars, artisan breads and flatbreads sold through the in-store bakery, foodservice, and convenience store channels. The company, led by CEO Mike Schultz, has approximately 1,000 employees, operates six facilities across the US, and is headquartered in Minneapolis (www.risebakingcompany.com).
“Arbor provided the capital and resources to enhance our capabilities, which made it easier to successfully integrate acquisitions and achieve significant organic growth, ultimately creating an industry-leading platform well positioned for the future. Their approach is unique in private equity and allowed us to focus on what we do best, which is run the business,” said Mr. Schultz.
Arbor formed Rise Baking in partnership with Mr. Schultz, a baking industry executive. In June 2013, Rise made its first acquisition with the buy of New French Bakery, a Minneapolis-based maker of branded and private label take-and-bake, par-baked and fresh artisan breads.
“Over the last 20 years we have developed deep expertise in baking and saw an opportunity to deliver innovation and better-quality products to retailers and in-store bakeries,” said Arbor’s CEO Gregory Purcell. “Mike shared our vision and had the industry contacts and relationships that enabled us to build a phenomenal business.”
Following the buy of New French Bakery, later add-on acquisitions for Rise Baking included Best Maid Cookie Company (October 2014), a River Falls, WI-based maker of branded and private label cookies and dessert bars in fully baked and frozen dough formats; Hudson Baking Company (August 2015), a Hudson, WI-based maker of dessert bars, brownies, cookies and other baked goods; South Coast Baking (February 2016), a frozen cookie dough manufacturer with facilities in Irvine, CA and Springdale, AR; Choice Foods (December 2017) a Woods Cross, UT-based maker of bakery products; and Pita Bread Factory (acquired by Arbor in October 2013 and later integrated into Rise Baking), a Burnaby, BC-based maker of pita bread, tortillas, bagels, flatbread, cookies and pies.
“Every add-on brought something different to the table,” said Arbor Partner Brody Lynn. “Each acquisition brought a new customer base, a new channel, or new capabilities that we could then use to build a one-stop shop offering innovative, high-quality products on a national basis.” Today, according to Arbor, Rise Baking is one of the fastest growing and largest independent bakeries in North America.
Arbor invests in the food, beverage and related industries. Typical targets will have annual revenues of up to $300 million and EBITDA from $5 million to $50 million. Since founding in 1999 the firm has acquired or invested in over 55 food and beverage companies in North America. In July 2016, Arbor closed its fourth equity fund, Arbor Investments IV LP, with$765 million of capital and its first subordinated debt fund, Arbor Debt Opportunities Fund I LP, with $125 million of capital. Arbor is based in Chicago (www.arborpic.com).
CEO Mike Schultz and the other members of Rise’ management team will continue in their roles under Olympus Partners ownership. “The Rise management team has built a remarkable business that has led to impressive growth across all of their products and customers. Rise is a well-invested and highly attractive business in the bakery sector,” said Mike Horgan, a Partner at Olympus.
Olympus provides equity capital for middle market management buyouts and for companies needing capital for expansion. The firm invests in a wide array of industries but has specific expertise in business services; logistics and transportation; healthcare manufacturing and services; financial services; consumer and restaurant; and general industrial and packaging. In December 2017, Olympus held a final closing of its seventh institutional private equity fund, Olympus Growth Fund VII LP, with an oversubscribed $3 billion of capital commitments. The firm was founded in 1988 and is based in Stamford, CT (www.olympuspartners.com).
“We are thrilled to back the Rise team as they continue to grow their existing business and pursue transformational acquisitions,” said Jim Conroy, a Managing Partner at Olympus.
© 2018 Private Equity Professional | August 9, 2018