Just shy of four years after investing in the Miami-based deli meats manufacturer National Deli, the Chicago-based private equity firm Arbor Investments has sold its stake to Chattanooga, Tenn.-based River Associates Investments for 2.7x its investment. The parties withheld terms of the sale.
Chicago, Illinois-based Arbor Investments announced that it has sold its portfolio company National Deli, LLC to Chattanooga, TN based River Associates Investments, LLC in a transaction that generated an internal rate of return of 30% and 2.7 times its original investment.
Headquartered in Miami, Florida, National Deli is a national manufacturer of premium authentic deli meats and all beef franks. The Company’s history dates back to 1982 when it began as the non-kosher division of Hebrew National which was later acquired by ConAgra Foods. Known particularly for its corned beef and pastrami products, National Deli sells a full-line of premium deli meats under its National Deliâ and extensive private label brands. Products are sold in some of the country’s best-known delis, professional sports venues, 4-star hotels and restaurants.
Arbor acquired the business in January of 2007 in conjunction with Operating Partner Steven Zoll and senior management. Arbor’s capital and food industry expertise enabled National Deli to accelerate its growth beyond its core Southeast geography, extending the Company’s reach across the United States.
“National Deli has performed well under our ownership, and will be a nice addition to River Associates’ portfolio. National Deli’s product quality is exceptional and its management team is very capable of taking this company to the next level,” said Joseph Campolo, President of Arbor Investments. “This transaction is a continuation of our strategy over the past twenty years of investing with exceptional management teams in lower middle market niche businesses. The National Deli management team is highly committed to the business, and we are excited to partner with them and look forward to working with them to continue to grow the company,” said Mike Brookshire of River Associates.
Duff & Phelps advised Arbor Investments and DLA Piper LLP (US) provided legal counsel. Miller & Martin PLLC served as legal counsel for River Associates.