In 2022, New Water Capital Partners LP, a private equity firm based in Boca Raton, Fla., acquired Klosterman Baking Co., Cincinnati. The Klosterman family, which founded the company in 1892 and had owned and operated it since, decided to step away from the baking industry and sell.  

“As a family, we decided it was in our best interest and the interest of the company that a new organization take the lead of the business,” said Chip Klosterman on behalf of the Klosterman family at the time of the acquisition. “New Water’s proven record of success in building on the strengths of partner companies to reach the next level of growth and success was vital to us in our selection process and makes them the preferred partner to continue our family’s legacy.”

Capital investment from a private equity firm is to be expected, but Dale Easdon, Klosterman’s chief executive officer, pointed out that New Water Capital goes beyond. While the firm’s goals with any acquisition is to grow the company and improve profitability, its approach can be unexpected. New Water Capital likes to take its time and start from a place of safety and culture, putting the product and the people first and foremost. 

“New Water Capital wants to ensure the brand is protected because you’re protecting the food and the people,” Easdon explained. “They recognize a good culture creates a good product, which helps scale the business. Strengthening the foundation is No. 1, and then we look at how do we invest for future growth, and that’s where capital investment comes in to grow the business.”

All of this investment in people, safety, leadership, culture and operations is aimed at creating a firm foundation upon which the company can grow. And it’s working. Klosterman Baking is growing so much that it has outgrown its historical headquarters building in Cincinnati. The facility in Hebron, Ky., with its expansive office space, will be serving as the new headquarters in the near future.

Easdon said that New Water Capital doesn’t put a timeline or target date on investing and divesting. They’ll continue to invest until they believe Klosterman’s Baking is at its best. And even then, they’ll look for a buyer who appreciates the legacy it’s purchasing.

“In the private equity world, there are guys who come in to cut costs,” Easdon explained. “Anyone can cut costs. If you take cheese off a pizza, you reduce the cost, but no one will buy the pizza. Klosterman is a 130-year-old company. We want to protect that value and that brand.”

This article is an excerpt from the December 2023 issue of Baking & Snack. To read the entire feature on Operations Executive of the Year, click here.