Cliffstar On The Block – Sources

Privately-held Cliffstar Corp. has hired Morgan Stanley to advise it on a sale of the company, four sources familiar with the situation said. The Dunkirk, N.Y.-based private label juice maker has been widely shopped to financial suitors.

Books were circulated in the past month with Morgan Stanley taking first round bids within the next week or so, the sources said.

The company sells store-brand juices to grocery chains and food service providers in the U.S. and Canada. Cliffstar was founded more than 100 years ago and remains under family ownership. Revenues are roughly $700 million, according to two sources.

The company’s private label offerings may be attractive to suitors given the resurgence of popularity in off-brand products. In the past year, private label makers have grabbed market share from pricier branded products as consumers trade down in a recession. Unit share grew 1.2 points to 22.8 percent, while dollar share inched up 0.7 points to 17.6 percent, according to a recent Information Resources report cited by Reuters Shop Talk and Brandweek.

Additionally, commodity costs have sunk, which could serve to boost the company’s margins. Still, private label companies compete on price alone and suffer from thinner margins than their branded competitors. Meanwhile, one buyout source said his firm passed on the deal because it was too widely shopped.

The company has not returned requests for comment.