Ohio Shop Looks To Expand Food Portfolio

Target: Eatem Corp.

Sponsor: Linsalata Capital Partners

Sellers: James J. Gervato, Robert G. Buono Sr.

Linsalata Capital Partners is hungry to expand its holdings in the food industry.

Executives at that firm are in talks to buy Eatem Corp., a Vineland, N.J.-based maker of ingredients used in soups and other prepared foods, according to a regulatory filing. If the deal proceeds, the Mayfield Heights, Ohio-based buyout shop would make the investment out of its latest fund, Linsalata Capital Partners Fund V LP, according to the filing. The firm closed the $425 million pool of capital in 2005.

Founded in 1983, Eatem, which does business as Eatem Foods, makes beef and chicken bases, kosher bases, seafood bases and vegetarian bases used in soups, sauces and other foods. The company touts itself as a pioneer of low-sodium, meat-first bases and vegetarian, organic and kosher bases, according to its Web site.

After mounting a three-year research effort, Linsalata Capital entered the food market in September 2008, buying Hospitality Mints Inc., a Boone, N.C.-based maker of promotional mints and candies. At the time of that deal, Senior Managing Director Eric Bacon told Buyouts the firm was looking for deals in private label (store-brand) food, niche-branded food, and companies that provide food services to schools and hospitals. In December 2009 the firm agreed to buy Spartan Foods of America, a Spartanburg, S.C.-based maker of pizza crusts and pancakes sold in grocery stores under the names Mama Mary’s and Mystic Pizza.

The prospective sellers of Eatem are listed in the filing as James J. Gervato, the company’s director of sales and marketing, and Robert G. Buono, Sr., the treasurer and business manager. Executives at Linsalata Capital declined to comment. Gervato, of Eatem, did not return requests for comment by deadline and Buono could not be reached for comment.

Linsalata Capital has made more than 85 acquisitions since its founding in 1984. The firm has been a generalist investor, acquiring companies in business services, food service equipment and pet products and services, among many others. It typically invests $10 million to $50 million of equity in companies generating EBITDA between $7 million and $35 million.