Hero Group’s sale of Signature Brands LLC is expected to attract middle-market private equity firms.
Hero has hired Rothschild & Co to run a process for Signature Brands, sources said.
Signature Brands provides specialty and holiday decorating products, like sprinkles, sanding sugars and icings, under the Cake Mate brand.
The Ocala, Florida, company also makes PAAS Easter egg decorating and Pumpkin Masters pumpkin carving products. The company produced $466 million revenue in 2012 and employed 466 people, according to press reports.
Signature Brands generates about $25 million EBITDA and is expected to fetch roughly $200 million, two sources said. Middle-market PE, those with a focus on food companies, are seen vying for Signature Brands, one of the people said.
Signature Brands was launched in 1951 as Pioneer Decorating Co. It changed hands several times before Hero acquired a 50 percent stake in the company, then known as Signature Brands, in 2006.
Hero, Lenzburg, Switzerland, is backed by the Oetker family. The company makes baby food, including Beech-Nut and Organic, as well as healthy snacks and jams.
The Swiss consumer-food maker owns all of Signature Brands, said Stephen Chetcuti, Hero’s spokesman. “We’re looking into strategic options for Strategic Brands,” Chetcuti told Buyouts.
Donna Cress, a Signature Brands human resources director, said Hero in the past few years has focused its efforts on growing its core businesses of jams, healthy snacks and infant formula. A potential sale would allow a new parent company to focus on investing in Signature Brands’ products and people, she said in an email.
“While the Hero Group has made the decision to explore the option of a potential sale of Signature Brands at this time, this does not ensure a sale will materialize,” Cress said.
Executives for Rothschild could not be reached for comment.
Action Item: Contact Stephen Chetcuti at email@example.com
Photo courtesy itakdalee/iStock/Getty Images