In a deal slated to close this month, Chase Capital Partners has agreed to sell Case Swayne Co., a custom sauces and seasonings maker, to Bestfoods, one of the nation’s largest food companies. Chase Capital General Partner Chris Behrens declined to disclose a transaction price.
Chase Capital in 1997 invested in Case Swayne with $40 million in equity and mezzanine financing (BUYOUTS Nov. 24, 1997, p. 8). Behrens said the sale will generate an internal rate of return on the equity of approximately 80%, while the mezzanine financing will bring an approximately 35% return.
The company, based in Corona, Calif., had 1998 sales of approximately $150 million, and since 1994, sales have increased at a compound annual rate of 25%, including two acquisitions, both of which occurred while Chase Capital owned the company.
Behrens said talks of selling Case Swayne came about while Chase Capital was in discussion with Bestfoods about acquiring one of its divisions. Bestfoods expressed interest in Case Swayne and Chase Capital decided selling was an attractive way for Case Swayne to continue to grow, Behrens said.
Bestfoods will combine Case Swayne with Milwaukee Seasonings, the custom food ingredient unit of Bestfoods’ North American foodservice business. Keith Swayne, chief executive officer at Case Swayne, will hold the same position at the new company.
Case Swayne, with approximately 600 employees, operates manufacturing facilities in Santa Ana, Calif., Bryan, Ohio and Wichita, Kan.
Bestfoods, based in Englewood Cliffs, N.J., is the maker of food products such as Hellmann’s mayonnaise and Skippy peanut butter. The addition of Case Swayne will raise Bestfoods’ North America food-service sales to more than $600 million.