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Charlesbank Capital, Partners Group to buy Hearthside Food Solutions

FBR Staff Writer Published 18 April 2018

An investment group led by Charlesbank Capital Partners and Partners Group has agreed to acquire US-based baking company Hearthside Food Solutions from Goldman Sachs and Vestar Capital Partners.

Financial terms of the transaction were not disclosed.

Hearthside Food, which is headquartered in Downers Grove, Illinois, is a food contract manufacturer that produces nutrition bars, cookies, cereals, crackers along with other baked food products and snacks for well-known food brands.

Established in 2009, the baking company has 25 manufacturing facilities in the US and Europe and has close to 8,000 employees.

Hearthside was acquired in June 2014 by Goldman Sachs and Vestar Capital Partners. Since their purchase, the baking company made four acquisitions including that of Standard Functional Foods Group, a Nashville-based nutrition bar manufacturer in November 2017.

Through the acquisitions, Hearthside had entered new categories while growing its business in Europe, said Goldman Sachs and Vestar Capital.

Hearthside founder, chairman, and CEO Rich Scalise said: “Our relationship with Goldman Sachs and Vestar was exceptional.

“Their partnership enabled growth, strategic direction and most importantly trust. We are excited about taking those enablers to the next level with Partners Group and Charlesbank as we look to new geographical markets, new categories to enter, and in continuing to make our customers first in everything we do.”

Post transaction, Partners Group and Charlesbank expect to work with the management team of Hearthside on various value-creation initiatives.

According to the two investment companies, the initiatives will focus on promoting organic growth by offering a broader range of innovative product solutions to customers, carrying out certain add-on acquisitions and streamlining current manufacturing processing among others.

Partners Group private equity Americas managing director Chris Russell said: “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.”

Image: Hearthside Food Solutions’ nutritional bar facility in Boise, Idaho. Photo: courtesy of Hearthside Food Solutions LLC.