Vestar looking for additions and expansion after Roland Foods recapitalization

Vestar Capital Partners’ drive to get Roland Foods ready for an exit after 11 years of ownership included a recapitalization of the New York-based specialty importer earlier this summer. The wrap-up is intended to give Roland the flexibility to pursue growth plans, including acquisitions in core or related product categories, said Ken O’Keefe, Vestar’s managing director and chief operating officer. PE Center.

Roland is a global brand, importer and supplier of specialty food products. The majority of its customers are foodservice distributors, with some specialty retailers and restaurants. The company sources more than 2,500 imported products from 40 countries and 350 suppliers, including roasted peppers, artichokes, balsamic vinegars, olives, quinoa and tahini.

Roland’s capital structure was expiring and its flexibility to meet growth targets was limited, said O’Keefe, a Roland board member. The recapitalization was consistent with Roland’s growth plans.

O’Keefe said Roland intends to expand its capabilities through acquisitions in core or related product categories that demonstrate high growth characteristics, defensive margins, brand appeal and are light in terms of assets, and can also benefit from Roland’s platform and infrastructure. Roland also intends to expand high-growth menu offerings that it does not currently offer. This includes products in Southeast Asia, Latin America, the Middle East and Africa. Geographically, Roland could also consider expanding into Canada.

Watching the growth

The company also sees room to make even more additions. “We have a solid pipeline of potential acquisitions that support our overall growth strategy and value proposition for our customers,” O’Keefe said. “I would be disappointed if we didn’t make a number of acquisitions in the coming years.”

Roland has expanded its product offering with two additional acquisitions in the past five years. The company entered the sweet food category with the acquisition of Albert Uster Imports (AUI) in 2019. AUI is an importer and distributor of confectionery, bakery and confectioneries based in Gaithersburg, Maryland. In 2023, Roland added ifiGOURMET, an importer of gourmet dessert products and ingredients based in Gurnee, Illinois. Vestar sees it as a complementary business to AUI.

Vestar acquired Roland in 2013. In 2017, Harvest Partners invested $125 million in Roland’s recapitalization and became a minority shareholder. Harvest was refinanced with Roland along with other debt providers following the closing of the recapitalization on July 31.

“We were fortunate to have a strong group of supportive financing sources who have done business with Roland for an extended period of time,” O’Keefe added. “As a result, we were able to secure a very attractive financing package that supports Roland’s growth objectives – including a deferred term loan to facilitate acquisitions. Vestar and co-investors also provided a significant amount of equity capital.”

Vestar did not want to disclose who the co-investors in Roland were.

The way out

According to O’Keefe, Vestar considered an exit in 2019. However, the pandemic and its impact on Roland caused the company to prioritize business performance. “During that time, we, along with Roland’s management team, identified significant growth opportunities to add value that we determined we could not realize without recapitalization,” he added.

There are currently no exit plans. However, Vestar’s recapitalization and plans for future additions may better prepare the company for an exit in the future.

“We believe Roland’s business model, management team, and historical and future growth prospects will be attractive to a variety of investor types going forward, including other private equity sponsors and strategic acquirers,” O’Keefe said.

Vestar, headquartered in New York, is a middle-market private equity firm focused on the consumer services, business and technology, and healthcare sectors. Since its founding in 1988, Vestar funds have invested more than $12 billion in 94 companies with a combined value of approximately $61 billion as of August.