Food Holdings, Inc.
Food Holdings is 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 Tennessee Valley Ventures (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’s original fund, and TVV 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 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 and Management to compare various transaction alternatives. Ultimately, TVV and Management chose a transaction with H.I.G. that provided: (i) substantial liquidity to both TVV and Management; and (ii) a new owner committed to fueling significant additional growth.
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Food Holdings, Inc. - advised this protein-based food processor, a portfolio company of Tennessee Valley Ventures, in its sale to H.I.G. Capital
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"The Brookwood team effectively conveyed a complex story to buyers; offered insightful guidance to us as sellers; and provided substantial support for Management. Brookwood’s marketing process generated significant interest, which yielded a very attractive return for our investor base. Brookwood’s skill and knowledge achieved that outcome, and in fact we have already hired them again."
Andrew W. Byrd President & Chief Manager, Tennessee Valley Ventures, L.P. |
