Food Holdings, Inc.

A protein-based food processor primarily serving national restaurant chains and institutional foodservice customers. Food Holdings is comprised of: (i) Albertville Quality Foods, a leading further processor of chicken products founded over 20 years ago; and (ii) Southern Quality Meats, a leading processor of pork sausage for almost 50 years.

Engagement Goals

Brookwood advised Food Holdings and TVV Capital (sponsor) on its sale to H.I.G. Capital.

Engagement Process and Outcomes

Owner and Management Goals – Food Holding was the oldest portfolio company in TVV Capital’s original fund, and TVV Capital had been instrumental in “professionalizing” Food Holdings and providing capital to grow processing capacity significantly beyond its original scope. Having pursued an earlier sale process with a larger national bank which did not meet valuation expectations, TVV Capital tasked Brookwood not only to maximize valuation with a buyer who would embrace the near-term capital investment necessary to support the Company’s accelerating growth trajectory, but also to “get the job done” – even in a challenging market environment.

Overcoming Challenges – Brookwood had to overcome numerous investor concerns, including assumed commodity price exposure, impending capital expenditure requirements, slaughter risk and customer retention concerns. More challenging were the economic recession and frozen credit markets overhanging the marketing process. Leveraging prior industry experience, Brookwood demonstrated that Food Holdings’ customized processing capabilities, niche-product focus and low-cost production processes provided a growing and defensible market position and strong free cash flow characteristics.

Excellent Result – The thorough marketing process generated both financial and strategic buyer interest, allowing TVV Capital and Management to compare various transaction alternatives. Ultimately, TVV Capital and Management chose a transaction with H.I.G. that provided: (i) substantial liquidity to both TVV Capital and Management; and (ii) a new owner committed to fueling significant additional growth.



Press Release Excerpt

We are pleased to announce that Brookwood Associates advised Food Holdings, Inc., a portfolio company of TVV Capital on the sale of the Company to H.I.G. Capital. This transaction is Brookwood’s second recently-completed transaction in the food processing sector and highlights our ability to leverage our significant industry knowledge. The closing, accomplished in an extremely challenging economic environment and the tightest lending market in recent memory, yielded a very attractive outcome for management and the shareholders, as TVV Capital reported an outstanding return on invested capital during the life of the investment. Critical components of the marketing strategy included clearly establishing the Company’s continuing growth trajectory and thoughtfully portraying a complex, multi-faceted business and industry story.