Gryphon to sell Flagstone Foods to TreeHouse Foods for $860 mln

Gryphon said Monday that it has agreed to sell Flagstone Foods to TreeHouse Foods for $860 million. Moelis & Company, Houlihan Lokey Capital and BMO Capital Markets Corp. advised Gryphon on the transaction. Based in Saint Paul, Minn., Flagstone Foods is a provider of healthy snacks to retailers in North America.

PRESS RELEASE

San Francisco, CA, June 30, 2014 — Gryphon Investors (“Gryphon”), a San Francisco-based private equity firm, announced today that it has agreed to sell its portfolio company Flagstone Foods™ to TreeHouse Foods in a transaction valued at $860 million.
Flagstone Foods, based in Saint Paul, Minnesota, is one of the nation’s leading providers of branded and private-label healthy snacks to major retailers across North America in the multi-billion dollar healthy snacks sector. The company was formed in November 2010 when Gryphon simultaneously acquired two independent companies, Ann’s House of Nuts®, the largest private-label manufacturer and marketer of trail mix and snack nuts in the world, and American Importing Company® (Amport Foods), the largest private-label manufacturer and marketer of dried fruits, to create the leading healthy snacks manufacturer in the country.

“We are delighted to have executed on our original vision of building a truly premier company in the rapidly growing healthy snacks sector. The strategic combination of Ann’s and Amport formed a vehicle for tremendous value creation under the direction of Gryphon’s proactively-recruited management team,” said David Andrews, Gryphon’s CEO and Managing Partner.
Keith Stimson, Gryphon Partner, added, “We are quite happy with the outcome of this transaction. TreeHouse has the resources and expertise to help continue Flagstone’s path of growth into new product categories and geographic markets. Gryphon achieved our goal of completing a sale that positions Flagstone for continued success, while also generating attractive returns for our limited partners and coinvestors in this investment, including the respective founders of Ann’s and Amport.”

Paul Lapadat, the CEO of Flagstone, commented, “Consistent with their strategy for Flagstone in recruiting me, Gryphon has been an exceptionally supportive partner, while delivering invaluable financial and operational guidance as we built the business. Our management team looks forward to utilizing the resources and support of TreeHouse to maintain our momentum and continue our growth strategies as a leading healthy snacking partner for major retailers.”

David Andrews further noted, “Flagstone’s ability to drive industry-leading top- and bottom-line growth organically over the past three years was impressive and reflects Gryphon’s ability to combine an innovative sector strategy with the right platform and management team. Paul Lapadat and the entire Flagstone management team have charted a course that Gryphon believes will attractively grow the company for many years. We wish them much continued success.”
Moelis & Company LLC, Houlihan Lokey Capital, Inc. and BMO Capital Markets Corp. acted as advisors to Gryphon, and Kirkland & Ellis LLP served as company counsel on the transaction. The transaction is subject to regulatory approvals and customary closing conditions.

About Gryphon Investors
Based in San Francisco, Gryphon Investors (www.gryphoninvestors.com) focuses on leveraged acquisitions of, and growth investments in, middle-market companies in partnership with experienced management. Having managed over $1 billion of discretionary equity capital, Gryphon has an extensive track record of investing up to $100 million of its own capital in companies with sales ranging from approximately $50 to $500 million. Gryphon prioritizes investment opportunities where it can form proactive partnerships with owners and executives to build leading companies, utilizing Gryphon’s capital, professional resources and operational expertise.

About Flagstone Foods
Flagstone Foods purchases, prepares, packages, distributes and sells over 1,500 branded and private label varieties of snack nuts, trail mixes, dried fruit, snack mixes and other wholesome snacks to major retailers in North America. The Flagstone Foods family of companies currently consists of Ann’s House of Nuts, the largest manufacturer and marketer of trail mixes in the world, and American Importing Company (Amport Foods), the largest private label manufacturer and marketer of dried fruits. The Flagstone Foods management team is comprised of consumer packaged goods food industry executives with experience from ConAgra, General Mills, Kraft Foods, The Pillsbury Company, Michael Foods, Procter & Gamble, and Ralcorp. For further information, visit www.flagstonefoods.com.

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