Kainos Capital sold specialty food service distributor Ferraro Foods to Kelso & Co. Kainos invested in Ferraro Foods in 2018 after building a relationship with Ferraro’s owner Michael Giammarino.
Kainos Capital (“Kainos”), a food and consumer-focused private equity firm, today announced the sale of its portfolio company Ferraro Foods to funds managed by Kelso & Company.
Headquartered in Piscataway, NJ, Ferraro Foods is a specialty foodservice distributor delivering quality food and supplies, primarily to the Italian restaurant and pizzeria segment in the Eastern U.S. The Company, which had its first sale in 1975, today sources over 7,000 products from around the world and distributes to over 6,000 end customers. Kainos partnered with Ferraro Foods in May of 2018 after having developed a prior relationship with Ferraro’s owner Michael Giammarino through the team’s network of industry relationships.
Andrew Rosen, Managing Partner of Kainos, said, “Our interest in Ferraro Foods was driven by our thematic-based approach to investing in the food industry and our experience partnering with founder owned businesses. We believed Ferraro Foods could play a unique role as the consolidator in the highly fragmented Italian specialty distribution segment along the eastern seaboard and Michael, with the Ferraro management team that we helped assemble around him, executed brilliantly.” Rosen continued, “We and the team sourced and integrated seven proprietary add-ons of other founder-owned specialty distributors which resulted in exceptional growth during our investment.”
Kevin Elliott, a Partner at Kainos, added, “We built a relationship with Michael Giammarino back in 2016 and were very fortunate to be selected by Michael to be the stewards of this great business that he and his family had built over 25 years. Our familiarity with the specialty distribution space and the Kainos team’s operational prowess assisted Michael and the Ferraro team in executing their growth strategies. Moreover, the Ferraro team demonstrated great operational leadership in driving the core business, even during the challenging pandemic environment, while also successfully integrating the proprietary acquisitions. The net result was performance that surpassed our original plans.”
Michael Giammarino, CEO of Ferraro Foods, continued, “Partnering with Kainos in 2018 was the right choice. The Kainos team helped us grow our footprint, adding four new centers and expanding into key markets including New England and Florida. They supported our team in commercializing the business with better use of systems and data, recruiting and hiring key leaders, and supporting the prospecting and closing of seven acquisitions made in the past two and a half years. Kainos’ ability to work with founder-owners and their appreciation for the importance of culture and heritage during the commercialization of the business allowed us to scale naturally and drive synergies through to strong financial performance. They did everything they said they would do and set us up for continued success.”
Rosen added, “this success could not have been possible without the investments in people and systems that will enable Ferraro to continue its role as a premier specialty Italian distributor on the East Coast.”
Wells Fargo Securities, LLC and Piper Sandler & Co. served as financial advisors to Ferraro Foods. Winston & Strawn LLP served as legal counsel to Ferraro Foods.
About Kainos Capital
Kainos Capital is a middle market private equity firm with an exclusive focus on the food and consumer sector. The Kainos team has extensive investment and operating experience in the industry, having invested more than $2.5 billion of equity in more than 75 transactions with a total transaction value of more than $11 billion. The firm’s strategy is to build a diversified portfolio of growing and strategically relevant food and consumer businesses. For more information, visit www.kainoscapital.com.
Kelso is one of the oldest and most established firms specializing in private equity investing. Since 1980, Kelso has invested $15.3 billion of equity capital in 132 transactions. Kelso was founded by the inventor of the Employee Stock Ownership Plan (ESOP) and, as a result, the principles of partnership and alignment of interest serve as the foundation of the firm’s investment philosophy. Kelso benefits from a successful investment track record, deep sector expertise, a long-tenured and stable investing team, and a reputation as a preferred partner to management teams and corporates. Kelso has significant experience investing in and supporting high-growth distribution platforms. The firm is based in New York, NY. For more information, please visit www.kelso.com.