Hearthside to acquire European bar maker

by Eric Schroeder
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Hearthside Food Solutions has agreed to acquire VSI, the largest European producer of nutrition, diet and functional bars.

DOWNERS GROVE, ILL. — Hearthside Food Solutions has made two acquisitions designed to expand the company’s presence in the Americas and Europe. First, the company said it has agreed to acquire VSI, Leerdam, The Netherlands, from NPM Capital. VSI is the largest European producer of nutrition, diet and functional bars. In a separate agreement, Hearthside said it is acquiring a nutritional supplement bar production facility in Boise, Idaho, from a subsidiary of Post Holdings, Inc.

Hearthside said the two transactions will enable the rapid scaling of VSI’s formulations, research and development, product development, and full-scale production in the Americas.

Financial terms of the transactions were not disclosed. Both transactions are expected to close in September.

In acquiring VSI, Hearthside will add three European manufacturing facilities to a portfolio that already includes 19 U.S.-based facilities. Hearthside Food Solutions is the nation’s largest and fastest-growing independent bakery and a full-service contract manufacturer of grain-based food and snack products for many of the world’s leading brands. Hearthside offers a diverse product portfolio focused on four main platform categories: bars, cookies/crackers, granola/cereals, and snacks. The company manufactures more than 150 brands and 1,400 stock-keeping units for its top customers.

Hearthside was acquired by Goldman Sachs, a global investment banking, securities and investment management firm, and Vestar Capital Partners, a private equity firm, in March 2014.

Rich Scalise, founder and chairman of Hearthside.

“This is both a category and geographic expansion, putting Hearthside into the three fastest-growing bar categories as well as in the European market, where VSI is a leader,” said Rich Scalise, founder and chairman of Hearthside. “The R.&D. and production expertise of VSI in the fast-growth categories of nutrition, diet and functional bars enables Hearthside to take a quantum leap forward, providing our customers with the most complete offerings in the industry.”

VSI began in 1976 as a bakery specializing in puff pastry products. The company added a small bar production line in the 1980s, but didn’t make the decision to focus on nutrition bars until the early 2000s. In 2002-03, the company built a new bar plant to expand capacity to 75 million bars annually, a figure that would increase to 126 million bars when VSI built a second production line in 2010. A third production plant opened in 2012, increasing annual production capacity to 260 million bars.

Meanwhile, the acquisition of a recently idled nutritional supplement bar production facility in Boise will enable Hearthside to quickly produce nutrition, diet and functional bars in the Americas. Post closed the former PowerBar plant earlier this year.

“It takes two years from greenfield to operational bar plant,” said Dwayne Hughes, senior vice-president of supply chain for Hearthside. “We wanted VSI capacity in the North American mix more quickly. This facility is ready to go today. The timing, the location, and the state-of-the-art equipment provides a perfect solution that makes us competitive in more bar categories immediately.”

Both Hearthside and VSI are contract manufacturers for food companies and global brands. The companies see no redundancies or conflicts in complementary customers and product offerings.

“This is the right move for VSI at the right time,” said Gerard Janssens, chief executive officer of VSI. “Our people, our leadership team and our customers all benefit from this acquisition. We will be able to do more things for more customers in more places. For example, we can design, formulate and commercialize a new bar, then produce it for customers in Europe and the Americas. This combined bar development and delivery platform sets new standards in the contract manufacturing industry.”
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