Fenway Partners, a private investment firm, announced yesterday that The H. J. Heinz Company (NYSE: HNZ) has purchased Delimex, a rapidly growing producer and distributor of branded, high-quality frozen Mexican foods. Terms of the transaction were not disclosed.
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Fenway acquired San Diego-based Delimex in 1997 from the original family shareholders and transformed the business from an entrepreneurial family-operated company into a first class organization with a leading brand in the high growth frozen Mexican category. The Company’s rapid and above market growth, which is approximately two to three times higher than the most attractive food segments, has been driven by a professional management team recruited by Fenway over the past four years. Since the acquisition in 1997, the team has successfully implemented initiatives to grow the business from less than $90 million in sales to more than $150 million in sales today. During Fenway’s ownership, Delimex built a state-of-the-art manufacturing facility, realized significant cost savings, reinvested these savings in the marketplace through trade and consumer promotions and advertising, and continued innovative new product introductions, all of which contributed to increased penetration into retail outlets.
“Delimex is well positioned to achieve the next level of growth with Heinz as a strong corporate partner that will provide powerful global marketing and distribution resources,” said Peter Lamm, Chairman and Chief Executive Officer of Fenway. “Our vision was to accelerate the growth of the business and we achieved that objective through a combination of retail expansion, high quality new product introductions, significant investments in the company’s operations and advertising, and recruitment of an outstanding management team. Most importantly, we accomplished our goals while preserving Delimex’s distinctive entrepreneurial culture.”
Founded in 1984, Delimex began as a supplier of frozen tamales to warehouse clubs. Over the years, the company has consistently introduced high quality new products, including taquitos in 1986. Since then, the taquito, which is a tightly rolled corn or flour tortilla filled with beef, chicken or cheese, has grown to become the company’s flagship product and one of the best selling frozen food SKUs in club stores. A number of factors were key to the acceleration of Delimex’s growth, including: broadening distribution to retail supermarkets, which now include over 10,000 outlets such as Wal*Mart, Albertson’s, Kroger and Safeway; building upon its club store base with superior service; enhancing manufacturing capability; and continuing to introduce innovative new products to complement its core lines of taquitos, tamales, rice bowls and quesadillas.
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By GlobalDataInstrumental to the company’s success was recruiting an experienced management team from large packaged food companies. The team, which includes Eric Brenk, Vice President, Operations, from Quaker Oats; William Parker, Vice President, Sales, from Campbell Soup; Dori Reap, Chief Financial Officer, from Frito-Lay; and, Roberto Pina, General Manager of Delimex’s Mexican division, will continue to manage the company’s operations. Kathleen MacDonnell, President and Chief Executive Officer, from Campbell Soup, will leave the company to pursue new opportunities.
“We are proud of what that the management team has accomplished in successfully executing the company’s strategic growth plan,” said Mark Genender, Managing Director of Fenway. “We recruited a talented group of senior executives with relevant packaged goods experience to broaden the company from its original club store base into retail supermarkets. The growth in retail was facilitated by our early investments in the operations of the business to optimize its cost structure. Overall, in partnership with management, we have created significant long-term value.”
Neil Harrison, President and Chief Executive Officer of Heinz Frozen Food Company, stated: “Delimex gives Heinz a solid base for building a branded Mexican presence for the first time. The popularity of Mexican food continues to rise and consumers are relying more than ever before on grab-and-go foods.”
About Fenway Partners, Inc.
Fenway Partners, Inc., recognized for successfully building brands and businesses, is a private equity firm based in New York with funds under management of more than $1.4 billion. In partnership with management, Fenway invests in companies with strong market positions and significant opportunities for growth. Fenway provides management and strategic guidance to improve operating and financial performance of its portfolio companies which include Simmons Company, Harry Winston, Decorative Concepts, Transport Industries, and other leading enterprises. For further information, visit the web site at http://www.fenwaypartners.com.
To view related research reports, please follow the links below:- Frozen Food: The International Market |
