Archives for October 10, 2023

Pritzker Private Capital has acquired privately held Sugar Foods Corporation in partnership with members of the Sugar Foods management team.

Sugar Foods is a producer and distributor of branded, private label and licensed products such as crunchy toppings, croutons, ready-to-use pizza toppings and beverage ingredients.

Company owned brands include Fresh Gourmet, Mrs. Cubbison, and N’Joy. The company’s products are sold to more than 3,000 customers including grocery retailers, foodservice providers, and quick-service and casual dining restaurants.

Sugar Foods, led by President Andrea Brule and CEO Marty Wilson, was founded in New York City in 1948 by Harry Tober as a local bulk sugar distributor throughout the New York metro area. In 1969 the company helped make Sweet’ N Low one of the most recognized names in the sugar substitute market. Sugar Foods stopped distributing Sweet’ N Low in 2006 and began diversifying the business into the bakery and snack markets under the Fresh Gourmet and Mrs. Cubbison brands and shifting the company’s focus to its own line of sweeteners and creamers under the N’Joy brand.

Today, the company has more than 1,400 employees and is headquartered near Los Angeles in Westlake Village, California, and operates five facilities in the United States and Mexico. Donald Tober, a former CEO and co-owner of Sugar Foods and the son of the founder, passed away in January 2021.

“Over the course of Sugar Foods’ nearly 75-year history, we have worked tirelessly to put our customers first and provide high-quality products that consumers love,” said Ms. Brule. “Together with PPC as our partners, we will continue to build on our award-winning reputation for product innovation and customer service.”

“We sought to partner with PPC because of their track record honoring family legacies and their shared commitment to our core values,” said Mr. Wilson. “With their support, Sugar Foods will be even better positioned to pursue exciting organic and acquisition growth opportunities, while preserving our rich employee-focused culture. We are thrilled to partner with the PPC family.”

Chicago-based PPC acquires North America-based middle-market companies that have enterprise values between $200 million and $1.5 billion and EBITDA of more than $15 million. Sectors of interest include manufactured products and services. The firm targets equity investments between $100 million and $400 million, with the ability to invest up to $750 million per transaction.

“Sugar Foods is a top provider of the essential ingredients of menu items that customers are demanding,” said Chris Trick, an investment partner at PPC. “The company is led by a strong team, and we continue to be impressed by its robust capabilities and track record of successful product innovations. We look forward to partnering with the Sugar Foods team through the company’s next chapter, as they capitalize on compelling growth opportunities, pursue strategic add-on acquisitions and further cement the company’s position as a partner of choice to its customers.”

PPC, led by Tony Pritzker and the former investment and operating professionals of Pritzker Group, closed its oversubscribed third fund, PPC Fund III LP, at its hard cap of $2.7 billion in July 2021.

Evercore was the financial advisor to Sugar Foods, and Houlihan Lokey advised PPC.

© 2023 Private Equity Professional | October 11, 2023

Kelso & Company has formed Armada Materials in partnership with industry veteran Rob Duke and other industry executives.

In tandem with the formation of Tampa, Florida-based Armada, the company has acquired Lewisburg, Tennessee-headquartered Volunteer Materials and its sister companies Volunteer Paving, Volunteer Sand and Gravel, Volunteer Concrete, Action Enterprise Company, and TMC Construction Services.

Volunteer is a vertically integrated producer of aggregates, asphalt, and ready-mix concrete and is a provider of road paving and striping services in the greater Nashville area. The company owns extensive limestone reserves including one of the few privately-owned quarries in Tennessee and has proximity to the fast growing I-65 corridor south of Nashville where several major companies have announced expansion plans and new job creation.

Mr. Duke will serve as the CEO of Armada Materials. He has more than 20 years of experience in the construction materials sector. Most recently, he was a senior executive at publicly traded and Dublin-headquartered CRH (Cement Roadstone Holdings) where he led the company’s cement, concrete, aggregate, and precast businesses in Western Europe. Earlier he was the president of CRH’s south division that provides cement, aggregate, asphalt, concrete, paving, highway construction, and bulk rail distribution services. CRH’s south division has more than $3 billion in revenue and more than 6,000 employees. Mr. Duke has also held senior positions at Florida-based Preferred Materials and CEMEX.

“I am thrilled to partner with Kelso and our other investors in launching Armada Materials,” said Mr. Duke. “We have assembled a premier group of leaders and advisors with deep industry experience and a shared vision as the acquirer of choice for private owners considering a sale of their business. We are very excited to team up with Volunteer and its management team under the leadership of Chad Swallows. Volunteer is an ideal, first platform for Armada with key locations in Tennessee positioned for further growth.”

Joining Mr. Duke at Armada is Travis Raitt, who leads the company’s acquisition efforts as EVP of Business Development. Mr. Raitt has past work experience at CRH, The Home Depot, and Macquarie Capital.

“We are excited about our partnership with Rob, Travis, and the broader Armada and Volunteer teams,” said Sandy Osborne, a managing director at Kelso. “We believe Armada provides a differentiated partnership solution for owners of infrastructure materials and services businesses.”

New York City-based Kelso & Company is one of the oldest and most established firms specializing in middle-market private equity investing. Since 1980, Kelso has invested over $19 billion of equity capital in more than 140 transactions.

Earlier this month, Kelso & Company held an above target close of Kelso Investment Associates XI LP with capital commitments of $3.25 billion. Included in Fund XI’s capital is participation by Kelso partners and employees of more than $400 million.

“We are eager to support Armada’s growth, both organically and through acquiring top-tier companies like Volunteer,” added Matt Edgerton, managing director of Kelso.

With the formation of Armada, Kelso’s newest fund is now invested in five platforms. The four earlier investments include Valenz, an Arizona-based provider of healthcare related payment and cost containment services to small and mid-sized companies (June 2023); Pathstone, an independent wealth management firm tailored to ultra-high net worth clients (May 2023); WilliamsMarston, a Massachusetts-based provider of non-audit accounting advisory, tax, valuation, and other managed services (August 2022); and Inovar Packaging Group, a Texas-based provider of pressure sensitive labels and shrink sleeves (May 2022).

© 2023 Private Equity Professional | October 11, 2023