

Premium Brands Holdings Corporation, a portfolio investment of Canadian private equity firm Pender West Capital Partners, has purchased Island City Baking and its affiliate Conte Foods for $20.3 million.
The total consists of $13.3 million in cash, $3 million in Premium Brands common shares and a minority equity stake in the Premium Brands’ bakery group, and it is subject to a closing net working capital adjustment.
Premium Brands concurrently announced the separate acquisition of Larosa Fine Foods, which will be merged with Conte Foods, for $700,000.
“Both transactions are expected to be immediately accretive to both Premium Brands’ earnings per share and free cash flow per share on an annual basis,” the company said in a statement.
George Paleologou, president and CEO of Premium Brands noted that Carmelo De Luca, president of Island City and An Nguyen, senior VP operations of Island City and the rest of their teams will join Premium Brands.
De Luca will head the new company merging Conte Foods with Larosa, a manufacturer and wholesaler of a variety of specialty Italian products. Vancouver-based Larosa, which has approximately $4 million in annuals sales, will be moving its operations into Conte Foods’ Burnaby, British Columbia facility.
Island City and Conte Foods have combined annual sales of approximately $20 million. Island City manufactures fresh and frozen artisan breads, operating out of a modern 45,000 square foot production facility in Richmond, British Columbia, while Conte Foods is a distributor of specialty food products, European imports and fresh pasta produced at the new 16,000 square foot Burnaby facility.
Premium Brands owns dozens of specialty food manufacturing businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, as well as Nevada, Ohio, Arizona and Washington State in the US.
Pender West Capital Partners, which has $150 million in assets under management and manages five other portfolio investments, first invested in Premium Brands in 2005. The firm’s initial target equity investments go up to $10 million, targeting long-term, five to 15 year investments, according to a its corporate overview. Company executives were unavailable for additional comment.