O2 Sponsor Finance Backs Borgman’s Cheese Consolidation

O2 Sponsor Finance Backs Borgman’s Cheese Consolidation

O2 Sponsor Finance was formed by Old Second Bancorp in January 2022 and is led by President Joe Gaffigan, the former president and co-founder of TCF Capital Funding

Back in June, Gilman Cheese, a manufacturer of processed cheese and a portfolio company of Borgman Capital, acquired Dairyfood USA. The acquisition of Dairyfood was backed by O2 Sponsor Finance, a division of Old Second National Bank, which acted as the administrative agent and lead arranger for $41.5 in senior secured credit facilities.

Dairyfood USA produces private label products including smoked links and loaves, snack wedges, portion control cups, dips and spreads, cut bars, and other non-dairy products such as plant-based cheeses. In addition to its private label efforts, the company also sells products under several house brands including Glacier Ridge Farms, Queso de Casa, and Sonoma Jacks.

[Source: Dairyfood USA]
Dairyfood’s customers include retailers, foodservice distributors, gift pack suppliers, airlines and other businesses operating in the travel channel. The company was founded in 1953 and, according to the company, is the largest producer of smoked Gouda in the United States. Dairyfood is headquartered 28 miles west of Madison in Blue Mounds, Wisconsin.

Gilman Cheese produces and packages shelf-stable processed cheese for the gift pack, retail, and airline sectors and also produces natural and processed smoke cheeses. The company has 140 employees and a 50,000-square-foot facility that produces 1.6 million pounds of processed cheese per month through more than 450 different products. Gilman Cheese is headquartered in the northern Wisconsin city of Gilman.

“We are thrilled Borgman Capital selected O2 Sponsor Finance as administrative agent and lead arranger on this transaction,” said Nick O’Brien, a vice president at O2 Sponsor Finance. “The combination of the two companies is highly complementary and makes Gilman stronger with a more diversified product offering, customer base and supply chain. We look forward to supporting both Borgman Capital and management as Borgman executes on its strategic objectives.”

O2 Sponsor Finance is a national provider of cash flow-based loans to lower middle market businesses with $10 million to $100 million in revenue and $2 million to $10 million in EBITDA. The firm focuses on supporting private equity sponsors, independent sponsors and family offices in their acquisition or recapitalization of lower middle market companies.

O2 Sponsor Finance was formed by Old Second Bancorp in January 2022 and is led by President Joe Gaffigan, the former president and co-founder of TCF Capital Funding. Mr. Gaffigan led TCF Capital Funding from 2012 to 2021 until TCF Bank was acquired by Huntington National Bank in June 2021. He remained with Huntington as the president of its sponsor finance unit until spinning out to join Old Second and form O2 Sponsor Finance.

O2 Sponsor Finance is headquartered in Chicago. Mr. Gaffigan can be reached via email at jgaffigan@oldsecond.com and by phone at 312-900-9943, and Mr. O’Brien can be reached via email at nobrien@oldsecond.com and by phone at 312-900-9949.

Borgman Capital invests in companies with revenues of $10 million to $100 million and EBITDA from $2 million to $15 million. The firm invests across a range of industries and prefers to invest in companies located in the Central and Eastern United States. Borgman Capital is an independent sponsor with funding for acquisitions coming from personal equity, accredited investors, and family offices. The firm is led by its managing directors Sequoya Borgman, David Bartelme and Michael Pepke and is headquartered in Milwaukee.

Old Second Bancorp is headquartered near Chicago in Aurora, Illinois and was founded in 1871.

© 2022 Private Equity Professional | August 23, 2022

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