HKW Closes Third Fresh Direct Add-On

Fresh Direct Produce, a distributor of fresh, ethnic, tropical, organic, and specialty produce and a portfolio company of HKW, has acquired Mike and Mike’s Organics.

Mike and Mike’s is a non-grower distributor of organic fruits and vegetables sourced from the United States, Canada, and other countries. The company delivers more than 200 types of organic fruits and vegetables to more than 200 national chains, independent retailers, wholesalers, and foodservice companies.

In addition to fruits and vegetables, the company also sells grocery and snack products. Mike and Mike’s was founded in 2004 by President Mike Fronte and Vice President of Operations Mike Dattoli. The company is headquartered near Toronto in Woodbridge, Ontario.

Headquartered in Vancouver, British Columbia, Fresh Direct distributes more than 1,000 conventional and organic fruit and vegetable items to the Western Canadian market. The company’s value-added services include ripening, grading, machine packaging, and bagging. HKW acquired Fresh Direct in December 2018.

“We are excited to partner with Mike and Mike’s Organics as part of our expansion into Ontario,” said Davis Yung, the CEO and co-founder of Fresh Direct. “Mike Fronte and Mike Dattoli will continue to lead the growth and expansion of the company along with an experienced and passionate management team, offering our customers and vendors a wider selection of produce offerings as well as a distribution network from coast to coast.”

“The partnership between Fresh Direct and Mike and Mike’s further expands Fresh Direct’s Canadian distribution footprint, but just as importantly we believe it brings an understanding of the products and operations for a critical region,” said Tom Shaw, a vice president at HKW. “As the third add-on acquisition to the Fresh Direct platform, HKW’s emphasis on health and wellness remains a key area of focus, and this add-on further strengthens our commitment to the sector.”

Fresh Direct’s two earlier add-ons were Islands West Manufacturing, a British Columbia-based wholesaler of produce, processed fruits, dried spices, and fresh-cut vegetables sold to grocery stores, restaurants, hotels, hospitals, schools and government facilities (September 2019); and Emperor Specialty Foods, a British Columbia-based distributor of mushrooms, pears, and other specialty fruits and vegetables (July 2019).

HKW invests in companies with EBITDAs between $5 million and $30 million. Sectors of interest include business services and health & wellness. In October 2019, the firm announced a final above-target close of HKW Capital Partners V LP with total commitments of $365 million.

Since 1982, HKW has acquired 63 North America-based lower middle-market platform companies and closed 69 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York.

Private Equity Professional | July 8, 2020

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