BURLINGTON, VT. — Koffee Kup Bakery, a manufacturer of baked foods, including bread, donuts and English muffins, serving customers in the Northeast and Mid-Atlantic regions, ceased operations on April 26. The company had 500 employees across its three baking facilities located in Brattleboro, Vt.; Burlington, Vt.; and North Grosvenor Dale, Conn.

Founded in 1940 to make and deliver donuts by bicycle to mom-and-pop stores in Burlington, Koffee Kup Bakery received a boost following its acquisition of Vermont Bread Co. in 2013 and has since grown into a company distributing its products to more than 4,500 delivery points supported by a 135-route distribution network.

On April 1, American Industrial Acquisition Corporation (AIAC), a New York-based private equity firm, acquired Koffee Kup. In a statement announcing the acquisition, G2 Capital Advisors, which facilitated the transaction, said Koffee Kup was “in the process of repositioning its business to capitalize on a compelling platform of established brands, private label partnerships, long-term relationships with blue-chip retailers, and a vast distribution network,” adding, “The company sought a financial partner to accelerate its next phase of growth and profitability.”

“Prior to the transaction, G2 had been serving as a financial adviser to KKB,” said Hubert Aubery, owner of Koffee Kup. “Their in-depth knowledge of the company’s needs and shareholders’ criteria allowed G2 to find the best fit for a new investor. Once our shareholders chose the right investor to partner with, G2 put all their efforts toward completing the deal in a timely manner. In the end, the work done by G2 maintained the criteria set out in the LOI and facilitated the entry of a new investor with deep ties in Vermont industry. The completion of this transaction will certainly drive the development of KKB in the interest of all its employees as well as financial partners and suppliers.”

Pat Reinhardt, managing director of G2, added, “The success of this transaction is a fantastic example of working with the current majority shareholder, KUPCO, who is committed to their employees. The owners and management team at KKB understood that in order to take their company to the next level, they needed a partner who would not only provide financial support, but operational expertise at the executive level. With AIAC’s commitment to not only providing immediate capital infusions but enriched credit facilities, together KKB & AIAC will uncover substantial operational improvements and ultimately maximize the growth potential of the company.”

But less than a month later, things took an abrupt turn.

Jeff Sands of Dorset Partners, a financial adviser to the owner, issued a statement on April 27 noting, “For each of the last four years Koffee Kup has suffered substantial financial losses and was unable to find a way out of their troubles. Employees, lenders, suppliers and customers all went above and beyond to support Koffee Kup during that time.”