Goldman Sachs Arm Plans Sale of Hearthside Food Solutions

By Lauren R. Hartman, Product Development Editor

Jan 12, 2018

The new year has the food industry off to an active start. Goldman Sachs Group Inc.’s private equity arm, Vestar Capital Partners, is reportedly exploring a sale of U.S. food manufacturer Hearthside Food Solutions LLC, Downers Grove, Ill., according to a report Jan 11 in Bloomberg.

Hearthside, one of the country’s largest independent bakeries and full-service contract manufacturers of grain-based food and snack products, has been an active acquirer of several bar makers over the past year.

If the groups proceed with the sale, the deal could bring in about $2.5 billion, Bloomberg reported. No final decision has been made, and the firms may choose not to proceed with a sale, sources added.

Hearthside was created in 2009 though an acquisition by Wind Point Partners, a Chicago-based private equity investment firm, and has grown rapidly over the past eight years. With the backing of Wind Point,  Hearthside acquired a substantial portion of the assets from Roskam Baking Co., based in Grand Rapids, Mich. Then, in May 2010, Hearthside purchased Consolidated Biscuit Co., McComb, Ohio, as well as the cereal division of Golden Temple, Eugene, Ore. Hearthside also acquired Oak State Products, a privately-held contract manufacturer of cookies, bars and other baked foods, in late 2016 and in November, 2017, completed the acquisition of Standard Functional Foods Group Inc., Nashville, Tenn.'

None of the companies involved in the rumored sale have commented publicly about any potential transaction. Goldman Sachs and Vestar agreed to purchase Hearthside Food in 2014 from Wind Point Partners for about $1.1 billion, sources familiar with the deal said at the time.

Hearthside, which makes granola bars and cookies marketed under consumer-product companies’ brand names, currently operates 24 production facilities, including 11 equipped for snack bar production. Three of the company’s production facilities are in Europe.

The food industry already this year has been busy in other deals. Italian Nutella maker Ferrero SpA could acquire Nestle SA’s U.S. confectionery business for about $2.8 billion, and Post Holdings Inc. announced Jan. 11 it will explore strategic alternatives for its private brands businesses that produce nut butter, dried fruit and nut, pasta and granola products.

 

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