Hearthside Defines Contract Manufacturing: BakingBusiness.com

From BakingBusiness.com October 10-2013

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Hearthside Tightens Focus on Contract Manufacturing

Hearthside Food Solutions sold Golden Temple in May because the Eugene, OR-based granola and cereal business no longer fit into its co-manufacturing business model, according to Rich Scalise, Hearthside’s chairman and CEO.

Downers Grove, IL-based Hearthside purchased Golden Temple in 2010 thinking that the cereal company would enhance its co-manufacturing capabilities and reduce shipping costs to the Northwest and West Coast. All of Hearthside’s other snack plants are located in the central US.

Not a brand company: During the past three years, Golden Temple’s branded and private label business expanded, and it became apparent to Mr. Scalise that it might be a better fit for another company. “We’re not in the branding business,” he noted. The proceeds from the $158 million sale to Post Holdings is helping fund the merger between Hearthside and Ryt-way Industries, Lakeville, MN.

Hearthside defines contract manufacturing: But how does Mr. Scalise define co-manufacturing? Co-manufacturing means Hearthside doesn’t sell directly to retailers or foodservice operators, and it doesn’t have any direct communication with consumers. Rather, it produces snacks and baked goods for customers that ultimately sell their branded products to retailers. Private-label products are typically sold under supermarket or store brands and sold directly to consumers.

Rich Scalise on American Bakers Association

From BakingBusiness.com October 10-2013

Rich Scalise and team in BakingBusiness interviewRich Scalise on American Bakers Association: For Hearthside Food Solutions, the American Bakers Association (ABA) provides not only a voice in Washington but also an opportunity to network with some of the Downers Grove, IL-based company’s biggest customers.

The value of the ABA: “ABA gives me access to all of the folks who have great brands,” noted Rich Scalise, Hearthside’s chairman and CEO as well as second vice-chairman on the association’s board. “ABA is one of the best organizations around in being close to legislation and regulations that can affect your business. It excels in having the ear and the access so we can explain the issues to legislators. I think it does it better than any other organization.

“It’s not about twisting someone’s arm,” he added. “It’s about the ability to have open dialogue with congressmen and senators about those things that really affect us and our ability to grow.”

Hearthside: A Fastest Growing Food Company

Inc 500 5000 fastest growing private company logoAugust 26, 2013 — Downers Grove IL — Hearthside has been ranked as one of the fastest growing companies in the US in the The 2013 Inc. 500 / 5000 List of fastest growing companies. Ranked at #1284 overall, Hearthside is also the largest and fastest growing contract manufacturer in the food industry, and a fastest growing food company, based on the data in the Inc 500 / 5000 tables.

The Inc 500 / 5000 List, published by Inc. Magazine, has ranked America’s fastest growing private companies since 1982. Inc Magazine has been continuously published since 1979 and is focused on fast growing companies in all sectors and industries.

2013 is the first year Hearthside was eligible for the Inc 500 / 5000 list which requires three years of annual sales to qualify. Hearthside also ranks as a fastest growing food company overall and one of the largest food companies on the list for 2013.

Read the full story at Inc Magazine.

Ryt-Way to Merge into Hearthside Foods

Media Contact:
Miranda McCoy
(312) 255-4836
mkm@wppartners.com

 FOR IMMEDIATE REEASE

 Wind Point Partners to Merge Two Portfolio Companies: Hearthside Food Solutions and Ryt-way Industries

 

Chicago, IL, May 15, 2013 — Wind Point Partners, a Chicago-based private equity firm, today announced plans to merge two of its portfolio companies – Hearthside Food Solutions and Ryt-way Industries. The merger, which will take effect in late May, will create the leading contract food manufacturer in North America, with over $1 billion in sales and 19 manufacturing facilities across seven states.

Wind Point acquired Hearthside in April 2009 and Ryt-way in August 2008. Both companies provide contract manufacturing services to leading food and consumer packaged goods companies in North America. During Wind Point’s ownership, Hearthside and Ryt-way each completed three acquisitions that further diversified each company’s customer base and product portfolio.

Rich Scalise, CEO of Hearthside Food Solutions, will assume the role of CEO for the combined business.

Rich is a 35-year veteran of the food industry who most recently served as President of Ralcorp Frozen Bakery Products, a division of Ralcorp Holdings, Inc. (NYSE:RAH). Rich previously spent 18 years with ConAgra Foods (NYSE:CAG) in a number of roles including his last position as President and COO of ConAgra’s $3 billion Refrigerated Foods Division.

“Hearthside and Ryt-way have a complementary customer base and supply chain capabilities. The combined company will be not only significantly larger but also able to deliver a wider array of services,” said Rich.

David Finch, CEO 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.”

About Wind Point Partners

Wind Point Partners is a private equity investment firm that manages commitments of approximately $2.5 billion. Wind Point focuses on partnering with top caliber CEOs to acquire middle market businesses where we can establish a clear path to value creation. Additional information about Wind Point is available at www.windpointpartners.com.

 About Hearthside Food Solutions

Hearthside Food Solutions, headquartered in Downers Grove, Ill., is the nation’s largest independent bakery and a full service contract manufacturer of high quality grain-based food and snack products for some of the world’s leading premier brands. Hearthside operates 12 food manufacturing facilities in five states. For more information on Hearthside Food Solutions, visit www.hearthsidefoods.com.

About Ryt-way Industries

Ryt-way, headquartered in Lakeville, Minn., is a leading provider of contract manufacturing and high performance packaging equipment solutions to North America’s leading food and consumer products companies. Ryt-way is known for its flexibility, scale and commercialization expertise in dry foods. Ryt-way operates seven production facilities across four states. Additional information about Ryt-way is available at www.rytway.com.

Hearthside Food Solutions Sells Golden Temple

Hearthside Food Solutions, a company backed by Wind Point Partners, is selling its Golden Temple business, which makes cereals and granola. The buyer is publicly traded Post Holdings Inc. Terms were not released. Hearthside is based in Downers Grove, Illinois.

PRESS RELEASE

Hearthside Food Solutions (“Hearthside”), a Wind Point Partners portfolio company, announced today that it has reached an agreement to sell its Golden Temple business, a manufacturer of all-natural ready-to-eat cereals and granola, to Post Holdings, Inc. (NYSE:POST). The transaction is expected to close after required regulatory approvals are received.

Hearthside, headquartered in Downers Grove, Ill., is a full service contract manufacturer of high quality grain-based food and snack products. Wind Point acquired the Hearthside platform in April 2009, in addition to three subsequent acquisitions, including the Golden Temple business in 2010. During Wind Point’s ownership, Hearthside has grown into the largest independent bakery in the U.S.

Wind Point invested in Hearthside in partnership with Rich Scalise, who joined as CEO at the time of Wind Point’s investment. Rich is a 35-year veteran of the food industry who most recently served as President of Ralcorp Frozen Bakery Products, a division of Ralcorp Holdings, Inc. (NYSE:RAH). Rich previously spent 18 years with ConAgra Foods (NYSE:CAG) in a number of roles including his last position as President and COO of ConAgra’s $3 billion Refrigerated Foods Division.

Mark Burgett, a managing director at Wind Point, said, “In addition to providing an attractive return on our investment in Golden Temple, the divestiture will allow Rich and his team to focus exclusively on Hearthside’s core business of contract manufacturing.”

Rich Scalise, CEO of Hearthside, commented, “Golden Temple performed very well over the past three years, and we grew both revenue and EBITDA significantly. Golden Temple products have a strong market position within all-natural cereals, and we think they will be an excellent addition to Post’s product portfolio.”

Wind Point’s other investments in the food industry include Shearer’s Foods (acquired in October 2012), Rupari Foods (acquired in July 2011), Nonni’s Biscotti (acquired in February 2011), Ryt-way Industries (acquired in August 2008), Santa Maria Foods (sold to Sofina Foods in 2012), and Bakery Chef (sold to Ralcorp in 2003).

About Wind Point Partners
Wind Point Partners is a private equity investment firm that manages commitments of approximately $2.5 billion. Wind Point focuses on partnering with top caliber CEOs to acquire middle market businesses where we can establish a clear path to value creation. Additional information about Wind Point is available at www.windpointpartners.com.

About Hearthside Food Solutions
Hearthside Food Solutions, headquartered in Downers Grove, IL, is the nation’s largest independent bakery and a full service contract manufacturer of high quality grain-based food and snack products for some of the world’s leading premier brands. Hearthside operates 13 food manufacturing facilities in six states with a workforce in excess of 5,000.