| Chicago,
Illinois – Code Hennessy & Simmons IV LP (CHS) recently
acquired Otis Spunkmeyer,
a leading manufacturer and distributor of frozen cookie dough,
pre-baked muffins and other hand-held sweet baked goods for
foodservice accounts and food retailers. Otis Spunkmeyer is
the #1 maker of frozen cookie dough and the #2 maker of pre-baked
muffins. The $275 million investment was financed through
Merrill Lynch and JP Morgan, who provided $100 million in
B notes, and through Goldman Sachs, who supplied preferred
stock and subordinated debt. CHS maintains a majority ownership
position.
“We pursued Otis Spunkmeyer as an investment
because we believe the company is rapidly becoming one of
the biggest names in food service,” remarked Andrew
Code, Partner at CHS. “The company already has a strong
national customer base, including Subway, ARAMARK and Sodexho
as well as other food service players.” Mr. Code also
noted that the company already has a strong management team
and has several new business initiatives planned for the near
term.
Otis Spunkmeyer is headquartered in San Leandro,
California and operates three manufacturing facilities in
the United States that produce over 30 million cookies and
3.6 million muffins weekly. The Company serves its customers
through its owned door-store-delivery network (including 415
routes and more than 50 sales centers) and through third party
distribution. The Company generated revenue of $250 million
in 2002.
Otis Spunkmeyer gives CHS investors a powerful
platform for growth in a non-cyclical industry. It has a history
of strong, proven leadership and a broad management team accustomed
to operating in a leveraged environment. The company has an
extensive customer base, a diverse vendor base and excess
manufacturing capacity to support its continued growth initiatives.
CHS intends to work closely with management to accelerate
the company’s foodservice growth initiatives and transition
its retail distribution system from owned to outsourced distribution.
Code Hennessy & Simmons LLC is a Chicago-based
private equity firm founded in 1988. The company has managed
more than $1.6 billion of capital in four funds. The firm
focuses on building shareholder value through strong relationships
and sound investment strategies. |
