Hearthside Food to merge with Ryt-Way
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CHICAGO — Wind Point Partners, a Chicago-based private equity firm, said it plans to merge two of its portfolio companies — Hearthside Food Solutions and Ryt-way Industries — later this month, creating a contract food manufacturer with more than $1 billion in sales and 19 manufacturing facilities across 7 states.
Wind Point acquired Hearthside Food Solutions in April 2009 and Ryt-way in August 2008.
Headquartered in Downers Grove, Ill., Hearthside Food Solutions is the nation’s largest independent bakery and a full service contract manufacturer of grain-based food and snack products. The company operates 12 food manufacturing facilities in 5 states.
Last week, Wind Point Partners agreed to sell some of Hearthside’s assets, including the branded and private label cereal, granola and snacks business, to Post Holdings, Inc. for $158 million. The transaction does not include Hearthside’s bars, cookies or crackers businesses.
Ryt-way, headquartered in Lakeville, Minn., is a provider of contract manufacturing and packaging equipment solutions to North America’s food and consumer products companies. The company said it is known for its “flexibility, scale and commercialization expertise in dry foods.” Ryt-way operates seven production facilities across four states.
Rich Scalise, chief executive officer of Hearthside Food Solutions, will assume the role of c.e.o. for the combined business. Mr. Scalise is a 35-year veteran of the food industry who most recently was president of Ralcorp Frozen Bakery Products, a division of Ralcorp Holdings, Inc. He earlier spent 18 years with ConAgra Foods in a number of roles, including his last position as president and chief operating officer of ConAgra’s $3 billion Refrigerated Foods Division.
“Hearthside and Ryt-way have a complementary customer base and supply chain capabilities,” Mr. Scalise said. “The combined company will be not only significantly larger but also able to deliver a wider array of services.”
David Finch, c.e.o. of Ryt-way, added, “This is a great opportunity for our customers. By offering a broader suite of capabilities, Hearthside and Ryt-way will become a one-stop shop for contract manufacturing.”
“Rich and David have done an excellent job driving strong revenue growth, commercializing new products and completing accretive acquisitions at Hearthside and Ryt-way,” said Mark Burgett, a managing director at Wind Point. “By combining two industry leaders, we are able to create significant growth opportunities for the business in addition to value for our investors. Given the similarities between the businesses, we expect to start realizing benefits immediately.”
Wind Point Partners is a private equity investment firm that manages commitments of approximately $2.5 billion.