Wind Point Partners, ignoring would-be pleas from Atkins dieters, acquired Nonni’s Food Company from a Swander Pace Capital-led investor group. Through the acquisition, Wind Point will take control of the Nonni’s brand of biscotti and panetini, as well as the New York Style brand of bagel and pita chips. Terms of the deal were not disclosed.
Wind Point reportedly beat out a rival bid from Chartwell Investments to win the UBS-run auction for the assets.
“We really liked these brands,” Wind Point Managing Director Bob Cummings said. “They’ve been consistent growers and have shown nice profitability in the past. They’ve seen a continued expansion of their market, and they’ve been very successful in the club stores.”
True to its strategy, Wind Point teamed up with industry veteran Tim Harris for the acquisition, plugging him in as the chief executive upon the deal’s close. Harris previously served as the president and chief operating officer of ConAgra’s Refrigerated Prepared Foods Group, where he oversaw the company’s Butterball, Armour and Healthy Choice brands, among others.
In further building Nonni’s, Harris cited that he expects the company to represent a platform for additional acquisitions. Cummings noted the investor group would seek out anywhere from three to six acquisitions, depending on the opportunities, and added that Nonni’s would also be opportunistic in expanding its retail coverage and extending its product line. The company generates approximately $85 million in sales, with EBITDA of less than $15 million, according to published reports.
To finance the deal, Merrill Lynch Capital, GE Capital Corp. and LaSalle Bank provided a senior debt package, while David L. Babson & Co. and Northwest Mutual contributed with a subordinated tranche. Wind Point, meanwhile, used equity from its $476 million Wind Point Partners V fund. The financing package is reportedly valued at roughly $68 million.
In discussing the exit possibilities Nonni’s could see, Cummings said, “There is the opportunity to approach financial buyers, but the most attractive long-term buyer would be in the cookie and cracker aisle already, and we’re hoping that this can generate some strategic interest down the line.”
Wind Point has already demonstrated a taste for baked goods in the past. In December the firm sold Bakery Chef to Ralcorp in a $287.5 million deal that yielded a return north of four times cash on cash, and earlier last year, the Chicago-based firm acquired Vicorp, which has a fairly extensive pie manufacturing operation.
Swander Will Be More Than Just Cookies
Swander Pace, meanwhile, will spin off the Mrs. Fields cookies and Cape Cod products brands, which were at one time under the Nonni’s umbrella, into a new company called Shadewell Grove Foods.
Swander Pace originally acquired Nonni’s for $28 million from Silverado Foods in 1999. The Silverado Foods president and CEO, Tim Bruer, at the time of the sale, went with Nonni’s in the purchase. The investment got off to a rocky start, with Silverado filing a suit later that year alleging that Swander Pace had failed to make certain earn-out payments totaling roughly $11 million. The company had also accused Bruer of breaching his fiduciary duty as president and CEO of Silverado.
Once the smoke cleared, Swander Pace, started to pursue additional acquisitions, and in January of 2001, the firm acquired B&G’s Burns & Ricker unit, which produces lines of bagel chips, pita crisps, biscotti and crispini. That deal, was valued at $26 million.
Swander Pace originally put the entire company up for auction in 2003, but ultimately decided to pull the Mrs. Fields and Cape Cod brands back from the process.