Kelso & Company acquires Ferraro Foods from Kainos Capital in US

Funds managed by private equity firm Kelso & Company has announced the acquisition of Ferraro Foods, a portfolio company of Kainos Capital.

The financial details of the deal have not been disclosed.

Kainos managing partner Andrew Rosen 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 speciality distribution segment along the eastern seaboard and Michael, with the Ferraro management team that we helped assemble around him, executed brilliantly.

“We and the team sourced and integrated seven proprietary add-ons of other founder-owned speciality distributors, which resulted in exceptional growth during our investment.”

Headquartered in Piscataway, New Jersey, Ferraro Foods is engaged in the distribution of food and largely supplies to the Italian restaurant and pizzeria segment in the eastern part of the US.

Ferraro Foods sources more than 7,000 products worldwide and distributes them to over 6,000 end customers.

Kainos partnered with Ferraro Foods in May 2018.

Ferraro Foods CEO Michael Giammarino said: “Partnering with Kainos in 2018 was the right choice. The Kainos team helped us grow our footprint, adding four new centres and expanding into key markets including New England and Florida.

“They supported our team in commercialising 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 commercialisation of the business allowed us to scale naturally and drive synergies through to strong financial performance.”

For this deal, Wells Fargo Securities and Piper Sandler & Co served as financial advisers to Ferraro Foods while Winston & Strawn provided legal counsel.

The sale of Ferraro Foods by Kainos Capital comes after the latter completed the acquisition of Nutrisystem, a direct-to-consumer nutrition and weight management brand, from Tivity Health for $575m in December 2020. The Nutrisystem deal was agreed to in October 2020.