Stonewall Kitchen Trades Hands in PE Deal
Specialty food and home goods producer Stonewall Kitchen has once again traded owners, with private equity firm TA Associate announcing on Monday it has taken a majority stake in the company “alongside the company’s management team.” Concurrently, former investor Audax announced that it had exited the business.
Terms of the deal between the Boston-based firms were not disclosed. In a release, TA associates noted that “day-to-day operations of the company will be unchanged,” with Stonewall remaining in its York, Maine headquarters and overseen by current CEO John Stiker.
Founded in 1991 by Jonathan King and Jim Stott as a jam and jelly brand sold at local markets, Stonewall has since expanded to offer a wide range of products including sauces, condiments, crackers and baking mixes. The company’s Maine headquarters includes production facilities, a large company store and, until its closing at the end of 2021, a cooking school.
Stonewall’s products are sold in roughly 8,500 wholesale accounts nationwide and internationally, at their eleven retail locations throughout New England, and direct-to-consumer via its catalogs and website.
The specialty food provider has changed hands several times in the recent past. In 2014 the company announced an investment by PE firm Centre Partners, with Striker coming aboard as CEO. Subsequently in 2019, Centre sold its shares to Audax.
Stonewall has been on an expansion tear over the last five years, picking up complimentary food businesses including pickled vegetables and cocktail cherries producer Tillen Farms, oil and vinegar brand Napa Valley Naturals, Italian pasta importer Montebello, the Legal Sea Foods line of sauces and condiments, apple sauce and apple cider vinegar producer Vermont Village, Urban Accents seasonings and sauces, and Vermont Coffee Co.
“One of the reasons we were excited to partner with Audax was their focus on the Buy & Build strategy,” Stiker said. “We have transformed the Company from a primarily standalone brand to a family of brands within specialty food and home goods… [Audax’s efforts] complemented our vision, helped us expand our capabilities and offerings, and took the Company to levels we could not have foreseen just a few years ago.”
Under Audax the company has also expanded into home goods adding Village Candles and Michel Design Works, a provider of bath and body products and home decor, to its roster of brands. In a report by MaineBiz, the company said it had shuttered its 13-year-old cooking school in favor of opening a new store focused on home goods.
According to a press release, these efforts have led Stonewall to “more than triple in size” over the last three years.
The past year has seen holding companies and rollups grow in popularity as a means of helping companies achieve scale and growth. Some, such as Fermented Food Holdings, have focused on one section of the store while others, such as the Planting Hope company or HumanCo, have brought on brands across aisles that align with a central positioning theme such as plant-based or better-for-you takes on indulgent offerings, respectively. These companies have attracted investor interest by promising that streamlining back office operations will yield synergies that will ultimately lower costs as well as grow margins and revenue.
A press release noted that Audax’s buy and build strategy follows this path, looking for “add-on acquisitions that fuel revenue growth, optimize operations, and significantly increase equity value.”
For Stonewall, the focus has largely been on acquiring brands that appeal to specialty food retailers as well as traditional grocers looking to bring in more heritage or hand crafted items. Though the range of categories is broad, the company has mainly added products that they believe would appeal to their core consumer base. Many of the additions have also been smaller brands to start with, targeting very specific sections of the store, meaning that the cost of acquisition was likely lower than a big name pickup.
Still, it seems as if the Maine brand isn’t done growing just yet. According a press release the Stonewall is still looking for more companies that it can easily bolt on to its existing portfolio
“Alongside TA, we aim to continue our dynamic acquisition efforts while also growing our existing Family of Brands,” Striker said. “Our focus will be on identifying products and brands that match our high-quality standards, and which preserve and enhance our core values and company culture.”
