Huntsman Gay Eats Up MaMa Rosa’s

Plaza Belmont Management Group has exited from Mama Rosa’s Pizza after five years.

Huntsman Gay Global Capital is the buyer. Financial terms of the deal, which closed Monday, weren’t announced. Huntsman bought all of MaMa Rosa’s, a spokesman says.

Sidney, Ohio-based MaMa Rosa’s sells refrigerated pizza’s–not frozen, mind you–that can be found in the deli/meat or dairy section of a grocery store. MaMa Rosa’s sells more than 3 million cases of large pizzas and mini snack pizza’s annually. It also offers refrigerated pizza products under the Mama Angelina’s, Our Old Italian and Lean Lifestyle brands, according to a statement.

Plaza Belmont, a Shawnee Mission, Kansas PE firm, acquired a majority stake in MaMa Rosa’s in 2006. The investment came from their second fund, which raised $17.1 million in 2004. Under Plaza Belmont’s ownership, MaMa Rosa’s showed a “nice increase” in profitability and a “good increase in sales,” says Robert Parnow, the firm’s president and COO.

“[The deal] has met our return standards for investors,” Parnow says.

The sale of MaMa Rosa’s wasn’t an auction, he says. Instead, Russ Stepke, of Resource Financial Corp., called Parnow in March 2010 and pitched a sale of MaMa Rosa’s. “He said he had a food industry executive that was familiar with [MaMa Rosa’s] and wanted to know if we wanted to sell it,” Parnow says.

Plaza Belmont, in fact, was beginning to consider exiting. “It was very good timing,” Parnow says.

Why MaMa Rosa’s? Convenience based fresh products are growing faster than frozen items, says Hudson Smith, a Huntsman Gay VP. Consumer behavior is shifting toward fresh food like pizza, sandwiches or salads,  he says. “The refrigerated pizza is a convenience item and something that someone wants to consume right away,” he says.

Smith declined to comment if there would be job cuts or management changes at MaMa Rosa’s.

Palo Alto, Calif.-based Huntsman Gay plans to grow MaMa Rosa’s business and do some add-on deals, Smith says. “We’re extremely excited to partner with the team at MaMa Rosa…The company is sending some refrigerated pizzas as we speak and we hope to have a large pizza party in the office shortly,” he says.

Huntsman’s investment came from its first fund which raised $1.1 billion in 2009. About half of the pool is invested, Smith says. A generalist investor, Huntsman Gay typically provides $25 million to $100 million equity per deal.

Plaza Belmont, which usually invests in food manufacturers and related industries, plans to begin fundraising for its third fund in fourth quarter. Pool III is expected to have a $100 million target, Parnow says.

Kevin Jach of Lazard Middle Market advised Plaza Belmont.