CHICAGO — Arbor Investments, a private equity firm that focuses exclusively on acquiring companies in the food, beverage and packaging industries, with a long history of baking investments, has announced it has taken a stake in The Bakery Cos. Financial terms of the transaction were not disclosed.
The Bakery Cos. bakes fresh and frozen bread and other baked foods and produces dough products for food service, food manufacturing and retail customers. The company dates back to 1996, when Cordia and Tom Harrington founded Tennessee Bun Co. in Nashville, Tenn. The Tennessee Bun Co. began with a high-speed bun line, baking 1,000 buns per minute.
In 1999, the Harringtons acquired Nashville Bun Co. as a packaging facility, and six years later they purchased Cold Storage of Nashville, an 85,000-square-foot freezer facility. In 2007, the Harringtons built Cornerstone Frozen, a frozen dough line, at Cold Storage of Nashville, selling biscuit and dough pucks to food service customers.
The Harringtons acquired Masada Bakery in Atlanta in 2014. Masada has an organic line, bagel line, bun and bread line and Danish pastry line.
In 2015, recognizing they had become more than a “bun company,” the Harringtons rolled their acquired businesses into a new company: The Bakery Cos.
Now, with Arbor’s investment, the Harringtons will join forces with another well-known baking family — the Caparos.
Ms. Harrington, known throughout the baking industry as the “Bun Lady,” will continue to lead the recapitalized company as chief executive officer. She will be joined by Yianny Caparos and George Caparos, who have been named president and chief development officer, respectively.
“For over 20 years, my family and our leadership have been committed to building trusted relationships with our customers, associates and the community around us,” Ms. Harrington said. “As we look to accelerate our growth, we are thrilled to be partnering and investing with Arbor and the Caparos brothers. Not only do we get to partner with industry experts like Yianny and George, but also with Arbor, the most accomplished private equity investor in the baking space. Together, we will invest in the infrastructure and facilities we need to write an exciting next chapter for our company.”
The Caparos brothers’ relationship with Arbor Investments dates back more than a decade. The Caparos brothers acquired Gold Standard Baking from East Balt in 2002, growing the business into a strong regional bakery. In 2008, Arbor acquired a controlling interest in Gold Standard and embarked upon a growth plan backed by a $40 million investment in equipment and facilities that transformed the company into the largest manufacturer of specialty croissants and strip Danish products in the United States. Arbor sold Gold Standard to private equity firm Tricor Pacific Capital in 2015.
Yianny Caparos expressed his excitement about the opportunity to work with Ms. Harrington, who was elected into the American Society of Baking’s Baking Hall of Fame in 2018.
“My brother and I have known and admired Cordia for decades,” he said. “We have tremendous respect for the business she has built and are thrilled to collaborate and invest with her and her outstanding team. As we enter our third partnership with Arbor, we’re eager to continue growing The Bakery Cos., bringing new ideas and innovation to meet the ever-changing needs of our customers.”
Gregory J. Purcell, co-founder and c.e.o. of Arbor Investments, added, “I’ve known Cordia since 1998 and have witnessed her incredible achievements. This three-way partnership is a perfect fit for Arbor, given our history and success investing in baking and partnering with dynamic entrepreneurs like Cordia and Yianny. It’s a potent combo. The Bakery Cos. lays the foundation, giving us the talent required to build a new powerhouse in baking manufacturing.”
Arbor’s nine prior baking-related investments include: Rise Baking (New French Bakery, Best Maid Cookie Co., Hudson Baking, South Coast Baking, Choice Foods), Pita Bread Factory, Gold Standard Baking, Mexican Accent and Great Kitchens.
The transaction marks Arbor’s fifth platform investment out of Arbor Fund IV. Winston & Strawn served as Arbor’s legal counsel in connection with the transaction. Bass, Berry & Sims served as The Bakery Cos.’ legal counsel.
Harris Williams, a global investment bank specializing in M.&A. advisory services, advised The Bakery Cos.
“Over its more than 20-year history, The Bakery Cos. has generated significant growth by providing customers with superior product quality and service,” said Tim Alexander, a managing director at Harris Williams. “Arbor Investments brings many years of experience in the industry, and we believe they will be a great partner for the company. We are excited to see the company build upon its leadership position.”
Brant Cash, a managing director at Harris Williams, added, “The food and beverage industry, and the bakery segment in particular, continues to attract investors. Harris Williams has witnessed this continued interest, having advised 10 food and beverage companies over the last 12 months. Innovative and flexible bakeries that can meet the demands of today’s customers are positioned for long-term growth, and companies like The Bakery Cos. are emblematic of this trend.”