Wind Point Gets New Food Platform with Buy from Rotunda
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Wind Point Gets New Food Platform with Buy from Rotunda

Since Rotunda’s initial investment in 2017, FreshEdge has closed seven acquisitions and nearly quintupled in size to become a super-regional distributor serving 21 states

FreshEdge is a category leader in providing the foodservice and retail industries with fruit, vegetables, proteins, fresh-cut produce, fresh grab-n-go offerings, dairy, floral, and specialty products.

SOURCE: Getty Images

Rotunda Capital Partners has sold FreshEdge, a fresh foods distributor, to Wind Point Partners.

Rotunda formed FreshEdge in August 2019 to facilitate the buy of Illinois-based Get Fresh Produce by Indiana-based IF&P Foods, which Rotunda had acquired in 2017. IF&P was formed in 1997 through the merger of Indianapolis Fruit and Piazza Produce, two produce distribution companies that served the grocery and food service industries.

Since Rotunda’s initial investment in 2017, FreshEdge has closed seven acquisitions and nearly quintupled in size to become a super-regional distributor serving 21 states out of 25 facilities with 800,000 square feet of combined warehouse space, more than 2,000 employees, and a fleet of 830 trucks.

“During our partnership, we invested to expand the company’s leadership team, developed corporate infrastructure and systems, and assisted in the execution and integration of seven add-on acquisitions,” said Dan Lipson, a partner at Rotunda.

A recently closed add-on by FreshEdge was City Produce, a Florida-based distributor of fruits and vegetables, dairy, meats, and seafoods (May 2022). Earlier add-ons include Pennsylvania-based Monteverde’s (November 2021), Michigan-based Vine Line (October 2021), Tennessee-based Valley Produce (June 2021), and Tennessee-based McCartney Produce (November 2020). Other brands of FreshEdge include Garden Cut, CIBUS Fresh, and Papania’s.

Today, FreshEdge is led by CEO Steve Grinstead and President Greg Corsaro and is one of the largest independent fresh food distributors in the United States. According to the company, it is a category leader in providing both the foodservice and retail industries with fruit, vegetables, proteins, fresh-cut produce, fresh grab-n-go offerings, dairy, floral, and specialty products.

“The Rotunda team provided us with the operational tools, distribution expertise, and acquisition assistance to help the company get to where it is today,” said Mr. Corsaro. “With this foundational support, we believe FreshEdge is well positioned for significant continued expansion.”

Mr. Grinstead and Mr. Corsaro will remain with the company and retain a meaningful ownership stake in partnership with Wind Point. “We look forward to working with the FreshEdge team to build upon the platform they have already established,” said Joe Lawler, a managing director at Wind Point. “We have great respect for Steve and Greg, and they have developed an outstanding business model that delivers an enduring value proposition resulting in strong, long-term relationships with customers.”

Wind Point is an active investor in the food and distribution sectors. Past investments have included Palmex, Tropicale Foods, Stir Foods, Hearthside Food Solutions, Evans Food Group, Handgards and Pestell Nutrition.

Chicago-based Wind Point invests from $50 million to $100 million in companies with EBITDA of at least $10 million. Industries of interest include business services, consumer products and industrial products. Wind Point is currently investing out of Wind Point Partners IX LP, which closed in February 2021 with $1.5 billion of capital. Fund IX is the largest fund ever raised by Wind Point.

“The FreshEdge story is a great example of Rotunda partnering with a first-class management team to transform a family-owned company into a data-driven acquisition platform,” said Corey Whisner, partner at Rotunda.

In addition to Mr. Whisner and Mr. Lipson, the Rotunda transaction team included Rohit Dhake, Brian Kim, Nathan Bertsch and Pat Davidson.

Rotunda invests in businesses with enterprise values of $30 million to $150 million. Sectors of interest include asset-light logistics, value-added distribution, specialty finance, and industrial and business services. The firm was founded as an independent sponsor in 2009 and is led by managing partner John Fruehwirth.

In January 2022, Rotunda closed its third fund, Rotunda Capital Partners Fund III LP, with $405 million in capital commitments. Fund III was oversubscribed and closed above its initial target of $295 million. Rotunda is headquartered in Bethesda, Maryland, with an additional office near Chicago in Evanston, Illinois.

Harris Williams was the financial advisor to FreshEdge on this transaction.

“The FreshEdge team built a fresh food distribution platform that strikes the perfect balance of customer-obsessed localized service with the benefits of scale – a strategy that positions the business as an acquirer of choice,” said Tim Alexander, a managing director at Harris Williams. “We expect M&A activity to remain elevated in the fresh food distribution sector given the industry fragmentation and trends favoring healthier eating.”

The Harris Williams transaction team was led by Mr. Alexander, Andy Warczak, Richard Furseth, Hannah Cho, and Jeremy Sachs.

© 2022 Private Equity Professional | October 5, 2022

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