HKW Loves its Fruits and Vegetables

Fresh Direct Produce, a portfolio company of Hammond, Kennedy, Whitney & Company (HKW), has acquired Islands West Manufacturing. HKW acquired Fresh Direct Produce in December 2018.

Islands West is a family-owned wholesaler of produce, processed fruits, dried spices, and fresh-cut vegetables. Customers of the company include grocery stores, restaurants, hotels, hospitals, schools and government facilities. Islands West was founded in 1995 and is headquartered in Victoria, BC.

The buy of Islands West follows Fresh Direct’s July acquisition of Emperor Specialty Foods, a Richmond, BC-based distributor of mushrooms, pears, and other specialty fruits and vegetables.

Fresh Direct Produce is a distributor of more than 1,000 fruit and vegetable items, including fresh, ethnic, tropical, organic, and specialty produce, to the Western Canadian market. The company’s value-added services include ripening, grading, machine packaging, and bagging. Fresh Direct, led by CEO and co-founder Davis Yung, has three distribution centers, two in Vancouver (headquarters) and one in Calgary, with a total of 152,000 square feet.

“This acquisition meets several key objectives for Fresh Direct, offering our customers a range of complementary new products, a wider and more efficient distribution network, and a state-of-the-art processing facility, adding capacity and improving operations,” said Mr. Yung. “With a strong leadership team already in place, Islands West immediately provides the fresh-cut capabilities our customers want, while at the same time expanding our overall product offering and geographic reach.”

“We are very pleased to partner with an organization that has the talent and capabilities of Islands West. The expanded range of products and the offering of fresh-cut vegetables, allows for significant cross-selling opportunities,” said Kent Robinson, an HKW partner. “HKW’s emphasis on health and wellness remains a key area of focus; this add-on strengthens our commitment to that sector.”

Hammond, Kennedy, Whitney & Company invests in companies with revenues between $20 million and $200 million and EBITDAs between $2 million and $20 million. Since 1982, HKW has completed 60 platform management buyouts of small middle-market companies throughout North America as well as 66 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).

© 2019 Private Equity Professional | September 12, 2019

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