Kelso & Company has acquired a majority equity interest in Individual FoodService, a distributor of foodservice disposables, and janitorial and sanitation products, from Sole Source Capital.
Individual FoodService (IFS) distributes more than 9,000 SKUs of paper, plastic, packaging, food, janitorial, and sanitation products to independent and quick service restaurants, healthcare facilities, hospitality establishments, country clubs, schools, universities, government institutions, wholesalers, food processors and foodservice management institutions.
Sole Source acquired IFS in November 2018 and combined it with Los Angeles-based Trade Supplies, a nonperishable foodservice distribution company that it acquired in June 2018. “It has been a pleasure to partner with IFS, and we are incredibly proud of the company’s success. Sole Source has made meaningful investments in technology and operations and is excited to see Kelso lead IFS in its next chapter of growth,” said David Fredston, managing partner at Sole Source.
Today, IFS is headquartered near Los Angeles in Bell, CA and operates a 400,000-square-foot distribution center and maintains a fleet of 80 vehicles capable of offering same-day delivery throughout California. The company, led by CEO Jeremy Shapiro, was founded in 1926 and was one of the very first Dixie cup distributors in Southern California.
“Kelso’s distribution experience, history of growing platforms and financial support will help us execute our core business strategy, pursue acquisitions, and add resources to our organization, ultimately strengthening our service offering and allowing us to better serve our customers,” said Mr. Shapiro.
“IFS has built an impressive brand in the marketplace that is extremely well-positioned for the future,” said Sandy Osborne, a managing director of Kelso. “We look forward to partnering with management to accelerate their acquisition strategy and growth initiatives. Furthermore, we are pleased to announce that Kenneth Sweder has been appointed chairman of the board of IFS. Ken currently serves as the CEO of SouthernCarlson and previously served as the CEO of Interline Brands, bringing significant distribution experience to the board.”
SouthernCarlson, an Omaha-based distributor of fastening and packaging products to the construction and industrial sectors, was acquired by Kelso in July 2016 from Tenex Capital Management and sold to Kyocera Corporation (NYSE: KYO) in June 2019. Interline Brands is a Jacksonville-based national distributor of maintenance, repair and operations products that was acquired by Home Depot (NYSE: HD) in 2015.
New York-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 $13 billion of equity capital in 127 transactions.
Santa Monica-based Sole Source Capital, the seller of IFS, makes control investments in high precision manufacturing, diversified distribution, and industrial service companies that have at least $50 million of revenue and $5 million of EBITDA. Sole Source was founded in 2016 and in November 2018 the firm closed its inaugural funds, SSC Partners I LP and SSC Partners I-A LP, at a combined hard cap of $160 million.
Lincoln International was the financial advisor to Sole Source Capital and IFS on this transaction. Current Capital Partners was the financial advisor to Kelso.
© 2019 Private Equity Professional | October 18, 2019