Ridgemont Equity Partners has acquired a majority interest in Worldwide Produce, a food products distributor, from Sole Source Capital. Sole Source will retain a minority stake in the company in partnership with both Ridgemont and the company’s senior management team.
Worldwide Produce is a distributor of more than 6,000 SKUs of fresh fruits, vegetables, dairy products, and specialty foods that are sold to restaurants, foodservice customers, and grocery stores across the western United States. According to the company, it is one of the largest produce and dairy distributors in Southern California.
Worldwide operates out of five climate-controlled distribution facilities located in California (4), and Nevada. The company was founded in 1989 and is led by CEO Todd Ferguson.
“We look forward to continuing our track record of adding new independent specialty food distributors to the Worldwide Produce footprint and integrating operations and relationships to strengthen our position in the market with our grower partners and customers,” said Mr. Ferguson. “We have the best salesforce in the business in our regions – they are knowledgeable and passionate and have built trusted relationships with key members of the local food communities.”
Sole Source acquired Worldwide Produce in October 2019 and closed five California-based add-on acquisitions of foodservice distributors: Left Coast Food Company (October 2022), Valley Food Services (June 2022), Chef’s Choice Produce (May 2022), Vision Produce (August 2021), and Avalon Fine Foods (August 2021).
“We have developed a great partnership with the Worldwide Produce team over the last three years and are very pleased to continue supporting the platform,” said David Fredston, the founder and CEO of Sole Source. “There are many more growth opportunities to pursue together and recapitalizing the business with Ridgemont and management positions Worldwide Produce to continue its trajectory.”
Dallas-headquartered Sole Source makes control investments in high-precision manufacturing, diversified distribution, and industrial service companies that have EBITDA from $5 million to $20 million. The firm specializes in the acquisition of founder-owned businesses and corporate carve-outs. Sole Source was founded in 2016 and is headquartered in Dallas with an additional office in Santa Monica, California.
“Ridgemont’s partnership with Worldwide Produce is the culmination of a multi-year firm effort to invest in the B2B food supply chain industry, based on the resilience of the food end market, durable shifts in consumer preferences for ‘better for you’ foods, and the increasing consumption of food away from the home,” said John Grenier, a principal at Ridgemont. “Worldwide Produce exemplifies many of the most important characteristics that we have been seeking – the company has a diversified customer and product mix, operates in a large and fragmented industry and is led by a strong, well-rounded management team that has experience executing organic and M&A growth initiatives.”
Charlotte, North Carolina-based Ridgemont focuses on middle-market buyout and growth equity investments of $50 million to $250 million in companies with $5 million to $50 million. The firm invests in the following sectors: business and industrial services, energy, healthcare, and technology and telecommunications.
Ridgemont’s investment in Worldwide Produce was made through its fourth fund, Ridgemont Equity Partners IV LP, which closed at its $2.35 billion hard cap in October 2022.
“We are excited to help implement a growth and value creation strategy that we’ve been successful executing with other specialty distributors,” said Tim Dillon, a partner at Ridgemont. “Together with management and Sole Source, we have the opportunity to build a super-regional leader through selective acquisitions across the United States. We are all aligned on how to invest in the team and operations so that the company can enter new markets and win new business. Worldwide Produce is large enough to benefit from scale with an extensive product and service offering, but locally focused to deliver a high-touch customer experience on a daily basis.”
Financing for the transaction was provided by Yukon Partners, Ares Management Credit Funds, NXT Capital, Kayne Anderson Private Credit, Manulife Investment Management, and PNC Erieview Capital.
“We are excited to be partnering with Ridgemont and the Worldwide management team,” said William Dietz, the managing partner of Yukon. “Worldwide has a strong position in a stable and attractive market, and we look forward to supporting the company as it capitalizes on its many exciting growth opportunities. Yukon has successfully partnered with Ridgemont in the past, and we respect the value-added relationship. We look forward to partnering with them again on Worldwide.”
Harris Williams was the financial advisor to Ridgemont on this transaction, and Truist Securities was the financial advisor to Worldwide Produce and Sole Source.
© 2023 Private Equity Professional | February 2, 2023
