New York-based private equity firm Ripplewood Holdings has sold Edwards Fine Foods to Schwan’s Sales Enterprises.
Officials at Ripplewood declined to state the amount of the transaction, although managing director Robert Berner siad the amount was “in excess of one times [ the company’s] revenue.”
Ripplewood, whose other food service portfolio company is Meyer’s Bakeries, initially invested in Edwards in 1995. Using Edwards as a platform, it acquired four more companies in a series of consolidating deals. Berner declined to state either the original sum Ripplewood paid for the companies, the total investment, or the IRR. But he did say that his firm not only met but exceeded its goals over the ownership period, and that Edwards has experienced about 10% sales and earnings growth over the past three years.
Both Berner and Andrew Kofman, principal of Ripplewood, gave Greg Murphy, Ripplewood’s industrial partner and CEO of Edwards, large credit for adding value to Edwards over the ownership period. Murphy was formerly president and CEO of Kraft Foods Bakery Companies Inc., a subsidiary of Philip Morris.
“This investment [and exit] is an example of how our industrial partnership model is supposed to work,” said Kofman. The foundation of Ripplewood’s investment approach is the concept of industrial partnerships that marries strategic, operational and financial skills in an investment vehicle in which all decision makers are both owners and managers.
Atlanta-based Edwards Fine Foods began as a one-man bakeshop in 1950. Today it has annual sales of roughly $200 million, according to the company, has won awards for best key lime pie and single serve pie from the American Pie Council and manufactures desserts for both the retail and restaurant markets across the United States.
Ripplewood manages approximately $3.9 billion in committed capital. The firm has invested approximately $2 billion in 42 companies, organized into eight industrial partnership portfolios: automotive manufacturing and retailing, consumer products, food manufacturing, wireless telecom equipment, industrial manufacturing, chemicals and educational publishing.
Berner, who has expertise in the food-related and consumer products industries, joined Ripplewood from Charterhouse Group International Inc. in May. Previously, he held a number of positions with Morgan Stanley for more than 11 years, most recently in the M&A department. He was also a cofounder of that firm’s food, beverage and consumer products group in 1989, which under his leadership successfully completed $125 billion of transactions.
He said, “It’s quite likely that Ripplewood will make more [food service acquisitions] in the future.”