Rotunda Capital picks produce platform

The deal sponsor hopes to use IF&P Foods as a launchpad to build a regional produce distributor focused on the Midwest and surrounding areas.

Lower mid-market buyout firm Rotunda Capital has acquired Indiana-based produce distributor IF&P Foods for an undisclosed sum.

The transaction includes the four companies that constitute IF&P: Indianapolis Fruit, Piazza Produce & Specialty Foods, Circle City Produce and Papania Produce. Also included in the deal is Garden Cut, a subsidiary that cuts and packages produce for customers of all IF&P entities.

Rotunda partner Corey Whisner told Agri Investor that the IF&P acquisition was an outgrowth of the firm’s focus on distribution assets and that it had been looking for a produce company for about two years. Value drivers are often the same across distribution regardless of the product, according to Whisner, who added that the non-cyclical nature of produce consumption limited risk on the investment.

Rotunda acts as an independent deal sponsor, raising capital on a deal-by-deal basis.

Whisner declined to identify investors supporting the IF&P deal, but did say they were attracted by the opportunity to utilize the firm’s distribution expertise in service of a produce industry supported by the increasing health-consciousness of consumers and the resulting expansion of produce offerings at restaurants and grocery stores.

“Distributors are a service organization, at the end of the day, that really is how you differentiate,” Whisner said. “We really like this business because we felt like they have a strong service-orientated culture, but we will continue to look for ways to improve that service even further.”

Whisner said that future acquisitions under Rotunda’s ownership would likely focus on building a regional distribution platform for the Midwest and surrounding markets. Additional investments to expand IF&P’s fresh-cut offerings are also possible, he said.

Headquartered in Washington DC, Rotunda was founded in 2009 and maintains an office in Chicago. Using capital raised from principals, institutions, family offices and high-net-worth individuals, the firm targets family-owned companies with between $4 million and $15 million in EBITDA and between $15 million and $100 million in enterprise value.

While the firm focuses on distribution, it also invests in the logistics, specialty finance and business services sectors.