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Charlesbank Capital Partners and Partners Group agreed to buy Hearthside Food Solutions. Financial terms weren’t announced. Goldman Sachs and Vestar Capital Partners were the sellers. Hearthside, of Downers Grove, Illinois, produces nutrition bars, cookies, cereals and other baked foods and snacks for some of the world’s premier food brands. Reuters valued the deal at more than $2.4 billion.

PRESS RELEASE

Charlesbank Capital Partners and Partners Group to acquire Hearthside Food Solutions

Charlesbank Capital Partners (“Charlesbank”) and Partners Group, the global private markets investment manager, acting on behalf of its clients, have agreed to acquire Hearthside Food Solutions (“Hearthside” or “the Company”), the largest independent bakery in the US, in partnership with management. The Company is being acquired from Goldman Sachs and Vestar Capital Partners.

Headquartered in Downers Grove, Illinois, Hearthside produces a broad range of high-quality nutrition bars, cookies, cereals and other baked foods and snacks for some of the world’s premier food brands. It operates 25 manufacturing facilities across the US and Europe and employs around 7,900 people.

Following the investment, Partners Group and Charlesbank will work closely with Hearthside’s management team, led by Rich Scalise, on a number of value creation initiatives. These will be focused on promoting organic growth by providing customers with an even wider range of innovative product solutions, executing select add-on acquisitions to further expand the business into adjacent industries and geographies, and optimizing existing manufacturing processes.

Rich Scalise, Co-founder, Chairman and CEO of Hearthside, comments: “By combining flexibility and innovation with quality and scale, we have been able to achieve our vision of transforming Hearthside into one of the leading and fastest-growing companies in the food industry. Today, we are delighted to be welcoming Partners Group and Charlesbank as partners for the next chapter of our success story and would like to thank Goldman and Vestar for their valuable partnership over the last few years.”

Chris Russell, Managing Director, Private Equity Americas, Partners Group, states: “Under Rich Scalise’s leadership, Hearthside has revolutionized food contract manufacturing, bringing scale to the industry. We see strong potential for the Company to continue on its growth path as its business model is supported by global transformative trends, such as increased outsourcing, which show no signs of flagging. We look forward to working with Rich and the rest of the Hearthside team.”

Ryan Carroll, Managing Director, Charlesbank, adds: “We are thrilled to partner with Rich and his team as they embark on the next chapter of Hearthside’s growth. The track record they’ve established since founding the Company in 2009 is truly impressive. Further, we know from our extensive experience in the industry that Hearthside has a reputation for providing the highest levels of service and quality to its customers, many of whom have worked with the Company for years. We look forward to building on this legacy.”

Ropes & Gray, Goodwin Procter and Latham & Watkins acted as legal advisors, KPMG and PwC as financial advisors and Jefferies as M&A advisor to Charlesbank and Partners Group.

Davis Polk acted as legal advisor, and Barclays and Goldman Sachs acted as financial advisors to Hearthside.

About Charlesbank Capital Partners
Based in Boston and New York, Charlesbank Capital Partners is a middle-market private equity investment firm managing more than $5 billion of capital. Charlesbank focuses on management-led buyouts and growth capital financings and also engages in opportunistic credit investments. The firm seeks to partner with strong management teams to build companies with sustainable competitive advantage and excellent prospects for growth. For more information, please visit https://protect-us.mimecast.com/s/ZA5jC2kGgEixOWvupUgkx?domain=charlesbank.com.

About Partners Group
Partners Group is a global private markets investment management firm with over EUR 62 billion (USD 74 billion) in investment programs under management in private equity, private real estate, private infrastructure and private debt. The firm manages a broad range of customized portfolios for an international clientele of institutional investors. Partners Group is headquartered in Zug, Switzerland and has offices in Denver, Houston, New York, São Paulo, London, Guernsey, Paris, Luxembourg, Milan, Munich, Dubai, Mumbai, Singapore, Manila, Shanghai, Seoul, Tokyo and Sydney. The firm employs over 1,000 people and is listed on the SIX Swiss Exchange (symbol: PGHN) with a major ownership by its partners and employees. https://protect-us.mimecast.com/s/kVgbC4xWkJSj3EyCoBFr5?domain=partnersgroup.com