From time to time we like to highlight deals in the news because they often illustrate how professional buyers operate. A perfect example was the recent announcement that Riverside Company, a leading lower middle market private equity firm, was selling one of its portfolio companies, Tate’s Bake Shop, to Mondelez International for $500 million.
The reason this deal caught my eye was twofold:
Riverside invested in the Southampton, New York-based cookie and baked goods specialist in 2014. Tate’s saw sales and earnings increase 4x during the last five years.
Key initiatives during Riverside’s investment included the significant expansion and improvement of processes around production, deepening of existing customer relationships, expanding distribution, new product launches and boosting the national sales and marketing team, which helped double brand awareness.
Now some might argue that Tate’s might have grown just as quickly without the help of Riverside. However, I highly doubt that when you consider all the significant initiatives that Riverside set in motion while holding Tate:
Riverside’s operational capabilities were key to the success of the investment. The firm helped Tate’s implement new processes, build out the management team, enhance distribution and improve packaging—all while maintaining quality and continuing to grow sales with new and existing customers.
This transaction highlights what we have been saying for years to many of our clients: Partnering with an equity firm that specializes in lower middle market acquisitions can be a real win-win for all parties.
Although details of the original acquisition were not disclosed, based on our experiences, these equity firm transactions are often created via “partial sales”. This is where 51% or more of the target is acquired by the equity firm, existing management is retained, and the new company is further invested in by the equity firm, helping it grow dramatically.
And these firms don’t just focus on financial engineering. They often, as was the case with Tate’s, provide leadership guidance, marketing and sales muscle, and extensive market knowledge to guide the portfolio company to greater heights.
Many of the business owners we work with often have tremendous ideas for growing their companies; they often simply lack capital and people/expertise to implement their ideas. Private equity firms like Riverside have access to both.
If you are interested in learning more about how professional buyers like Riverside can be great partners for your company, you should attend a Generational Equity educational exit planning conference.
While there, you will not only learn a tremendous amount about the exit process (and how to do it right), you will also be able to meet one on one with our professionals and they can provide ideas that pertain to your specific situation/goals/timing. After this, you will have a clear understanding over whether partnering with a private equity firm is in the best interests of your financial legacy.
To learn more, call us at 972-232-1121 or use the following links:
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2018 Generational Equity, LLC. All Rights Reserved.
it all started with a conference.
start your story today,
speak directly with one of our senior advisors +1-972-232-1121
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
Generational Group’s affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Group to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Group is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.
Success, you have been added to our list.