The sale of Hearthside Food Solutions has been officially announced, with private-equity firm Charlesbank Capital Partners and investment manager Partners Group teaming up to buy the US-based contract manufacturer.
Hearthside has been owned by private-equity firms Goldman Sachs and Vestar Capital Partners since 2014, when they snapped up the cereals and snacks producer from another buy-out house, Wind Point Partners.
Rich Scalise, Hearthside’s co-founder, chairman and CEO, will stay on to work with the new owners on “a number of value creation initiatives”, a statement read.
“These will be focused on promoting organic growth by providing customers with an even wider range of innovative product solutions, executing select add-on acquisitions to further expand the business into adjacent industries and geographies, and optimizing existing manufacturing processes.”
Scalise added: “By combining flexibility and innovation with quality and scale, we have been able to achieve our vision of transforming Hearthside into one of the leading and fastest-growing companies in the food industry.”
Hearthside runs operates 25 manufacturing facilities across the US and Europe and employs around 7,900 people.
The company has added to its operations through M&A under the ownership of Goldman and Vestar. In 2015, Hearthside struck a deal to buy Netherlands-based nutrition bar maker VSI from Dutch private-equity firm NPM Capital. A year later, the group bought US bar, biscuit and cracker maker Oak State Products. In October last year, Hearthside then acquired fellow US firm Standard Functional Foods Group.
Ryan Carroll, Charlesbank’s managing director, said: “The track record they’ve established since founding the company in 2009 is truly impressive.”
Chris Russell, the managing director for private equity in the Americas for Partners Group, added: “Under Rich Scalise’s leadership, Hearthside has revolutionized food contract manufacturing, bringing scale to the industry. We see strong potential for the company to continue on its growth path as its business model is supported by global transformative trends, such as increased outsourcing, which show no signs of flagging.”