AUSTIN, TEXAS — TGF Management, a private equity firm focused on management buyouts and recapitalizations of middle market companies in the Southwest, has acquired Sterling Foods, Ltd. from ICV Capital Partners, L.L.C., New York. Financial details were not disclosed.

Founded in 1971, Sterling Foods is a supplier of baked goods, as well as a provider of gourmet bakery items to the food service and retail industries. Based in San Antonio, the company’s products include brownies, cakes, cookies, snack bread, soft pretzels, muffins, scones, pizza crusts and biscuits that are sold in restaurants, supermarkets and club stores. In addition, the company provides products to schools and the weight management industry, and is the largest supplier of shelf stable bakery products to the military.

ICV acquired Sterling Foods in late 2001 for $35 million with the intent to invest capital to grow the business and to diversify into new markets. In May 2007, the company completed the add-on acquisition of Buena Vista Food Products, a move that allowed Sterling Foods to serve the rapidly growing education market.

"We are extremely pleased with the outcome of our investment in Sterling Foods and the initiatives that were successfully implemented to enhance the business," said Willie E. Woods, a co-founder and president of ICV. "The strategic growth plan was executed in concert with Sterling’s strong management team and included leveraging its R.&D. leadership to drive innovative new products, expanding its business into the commercial bakery sector, and further building its base of large food service customers. We also acquired and successfully integrated a leading baked goods business to enter an entirely new market. The company today has a significantly improved business model and we have realized an attractive return on our investment in these especially turbulent market conditions."

While it is not the first food-based company that TGF Management has taken a stake in, it does the mark the first such acquisition for the firm’s Southwest Opportunity Partners, L.P. division.