The Interview
The Interview
Brian P. O'COnnOr
Vestar’s latest acquisition:
Roland Foods
Vestar’s recent acquisition of Roland
Foods showcases two longstanding
strengths of the firm: its track record of
growing consumer products companies
and its commitment to working alongside
incumbent managements and founding
families.
Roland Foods is a recognized leader in the
imported specialty foods business in
the U.S. and around the globe. “Vestar
appreciates and shares our values,” says
Charles E. Scheidt, a member of the
company’s founding family and CEO of
Roland Foods. Mr. Scheidt, who continues
as chairman of Roland, adds that he and
his team are already working with their
Vestar partners on new ideas to grow
Roland’s brands and enhance its already
exceptional customer service.
“Roland Foods is a great company with a
unique niche and superb reputation in
the industry, and an exceptional initial
investment for our new Vestar VI fund,”
said Dan O’Connell, Founder and CEO of
Vestar. “Coupled with the bright growth
outlook we see in the specialty foods
sector, we believe Vestar’s resources and
experience in the food and branded
products arena can help Roland Foods
grow substantially.”
Roland Foods, based in New York City,
specializes in importing high-quality
specialty food products from more than
40 countries. Founded in Paris in 1934
and established in the U.S. in 1939, the
company today has a national presence in
the foodservice, retail, and industrial
channels as well as international sales
in the Caribbean, Central and South
America, Asia, Africa, and the Middle
East.
34
www.finance-monthly.com
Vestar Capital Partners, founded in 1988, marked its 25th anniversary
in 2013. Five of the firm’s founding partners have worked together for
more than 30 years, giving VCP a consistent investment focus and
management continuity that is unusual in the world of private
equity. Throughout the firm’s history, its core values – integrity,
transparency, teamwork, and performance – have also remained
consistent and continue to guide its activities today.
S
ince the firm’s founding, Vestar
funds have raised in excess of
US$9 billion in capital and
completed 70 investments in
companies with a total value of
more than US$40 billion. Of those
investments, 80 percent have been realized or
are now publicly traded.
Brian P. O'Connor is a managing director of
the firm and co-head of Vestar’s Consumer
group. Brian came to the firm in 2000, and
since then has worked on a number of its
signature consumer and food investments,
including Del Monte, Solo Cup, Sun Products
and, most recently, the acquisition of Roland
Foods.
What more can you tell us about Vestar
Capital Partners and its Consumer
Group?
Vestar Capital Partners is a leading U.S.
middle-market
private
equity
firm
specializing in management buyouts and
growth capital investments. Vestar invests
and
collaborates
with
incumbent
management teams and private owners in a
creative, flexible and entrepreneurial way to
build long-term enterprise value.
We are targeting equity investments in the
range of $50 million to $250 million in U.S.based middle-market companies with
enterprise values ranging from $100 million
to $1 billion. We have extensive experience
investing across a wide variety of industries in
addition to Consumer. Other investment
sectors include Healthcare, Digital Media,
Information Services, Diversified Industries,
and Financial Services.
The Consumer sector has been a core focus of
our firm. Within Consumer, we have not
only invested in food companies, but also in
household products, personal care and
apparel, among other consumer categories.
Our prior investments include companies
such as Birds Eye Foods, Michael Foods,
Celestial Seasonings, Remington, Prestone,
and Gold Toe.
What
have
been
some
developments at Vestar in 2013?
key
sell the canned food business of Del Monte
Foods to Singapore-listed Del Monte Pacific
Ltd for $1.7 billion. The deal allows Del Monte
Foods to concentrate on its pet foods unit, including
the
recent
acquisition
of
Natural Balance, a specialty pet food
company. The pet category is one of the most
attractive and fastest-growing categories
in the U.S. Del Monte Foods company was
acquired in 2011 by a private equity
consortium – which includes Vestar Capital
Partners, KKR and Centerview Capital – in a
deal valued at $5.3 billion.
In September 2013, we acquired a majority
interest in New York City-based Roland
Foods, which specializes in importing
high-quality specialty food products from
more than 40 countries.
In mid-summer, our firm named two
founders – Norman W. Alpert and Robert L.
Rosner – as co-presidents. In addition, in
2013, VCP returned more than $400 million
to our partners, capping a multi-year
realization program which returned in excess
of $2.5 billion in cash.
Finally, we closed and activated our sixth
private equity fund, Vestar Capital Partners
VI, with total commitments of more than
$800 million. Our new fund is focused on
opportunities in our sweet spot, the North
American middle market, and we have ample
capital firepower to capture these attractive
investments.
Vestar had an active and highly productive
year in 2013. Two of our most recent key
developments involved food company
investments.
What are the most significant trends
you’ve seen in the food industry
recently?
In October, we and our co-investors agreed to
Our interest in Roland Foods was partly
driven by two strong industry tailwinds: food
consumed away-from-home continues to
grow and specialty food growth has exceeded
– and continues to exceed – growth in the
food market overall.
As the U.S. slowly emerges from its economic
downturn, consumers are venturing out to
restaurants more frequently. In addition –
both at home and in restaurants – consumers’
appetite for specialty and ethnic foods
continues to grow. Demographic trends also
support a bright outlook for specialty foods.
Specialty foods are on trend in a big way.
What other trends are emerging in the
food industry and how do they affect
your approach to investments?
Health and wellness continues to be an
extremely strong trend among consumers.
Consumers are more conscious of what they
eat and more sophisticated regarding their
choices and preferences. We successfully
capitalized on this through our Birds Eye and
Del Monte investments in fruit and vegetable
product offerings.
And, it’s not a trend that’s limited to “people
food.” Pet owners are also seeking organic, all
natural, premium ingredients for their dogs
and cats, and the Del Monte Pet unit,
primarily through its Natural Balance brand,
is taking advantage of that trend.
Overall, health and wellness trends are
driving a lot of innovation in food companies.
At Vestar, we are focused on identifying and
investing in businesses that are “on trend”
with health and wellness, businesses with
brands and potential that can benefit from our
extensive experience in this sector.
What challenges are private equity
investors facing today in the food
industry?
Valuations are trending on the high side for
consumer businesses right now. Smart
investors need to be able to not only identify
consumer businesses with potential to grow
and expand, but also, businesses where the
investor can add value, take advantage of the
potential and accelerate growth … like we are
doing with Roland Foods.
What lies ahead for Vestar in the New
Year?
We are actively engaged in identifying and
pursuing investments for Vestar VI, and
expect to make seven to 10 investments
during the next three years or so. We
anticipate additional realizations in 2014 for
our partners.
Contact
Vestar Capital Partners
245 Park Avenue, 41st Floor
New York, NY 10167
USA
Tel: +1 (212) 351-1600
Email: [email protected]
Web: www.vestarcapital.com