Deals

Generation Growth supports merger of Midwest retail suppliers

The merged company will look to expand and focus on the provision of healthy prepared food options.

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Milwaukee-based private equity firm Generation Growth Capital has made an investment to recapitalise Select Food Products and support its merger with Tino’s Italian Specialty Foods.

Generation Growth managing director John Reinke told Agri Investor that his firm intends to grow the merged business, help streamline a shared focus on expanding into the health food market and purchase new equipment.

Reinke
Reinke

“A focus of both businesses is trying to drive healthy food choices and selections into channels that are not always associated with health food,” Reinke said. “We see a growth trend with more and more products moving into convenience store channels.”

The new company, which will operate under the Select Foods name, has already signed contracts to deliver private label products to grocery store customers including Kroger and Target, he added.

Select Foods manufactures sandwiches, snacks and deserts distributed to customers across the retail, club, convenience store and food service sectors; while Tino’s provides calzones, subs, paninis, pizza, condiments and breakfast and lunch options sold at convenience stores. Both firms are based in Minnesota.

Tino’s owner Tino Lettieri, who will assume positions as Tino’s brand manager and Select Food’s head of research and development, said in a statement that the merger “gives us access to the manufacturing capacity and quality that we need”.

Senior debt for the transaction was provided by Anchor Bank, with mezzanine financing provided by EXMARQ, while Platinum Group served as advisor to the renamed Select Foods.

Generation Growth Capital is a Midwest-focused private equity firm specialising in manufacturing, service and distribution businesses with enterprise values of less than $30 million and sales of between $5 million and $50 million. The firm’s investments are primarily between $1 million and $10 million of equity, though it also provides subordinated debt and utilises warrant structures in some instances. Reinke declined to specify the amount invested into Select Foods.