News

Riverside Advisors Advises Castro Foods Wholesale, Inc. in Sale to Kirtland Capital Partners

Chicago, IL and Southfield, MI – September 2019 – Riverside Advisors (“Riverside”) is pleased to announce that it served as the exclusive financial advisor to Castro Foods Wholesale, Inc., dba La Guadalupana, (“Castro”) in its sale to Kirtland Capital Partners (“KCP”).  Concurrently with the sale of Castro, an acquisition of El Ranchero Food Products Ltd (“El Ranchero”) was consummated to add scale and product line breadth.

Based in Chicago, Illinois, Castro is a manufacturer of tamales, masa and selected food service products sold to retail, restaurants and “hot bar” applications.  Founded in 1945 by the Castro family, Castro has developed its reputation for authentic tamales and masa by using only fresh ingredients with no preservatives in the same manner since arriving from Mexico. Castro products are sold under the La Guadalupana brand throughout stores within 500 miles of Chicago.

Simultaneously with the sale of Castro, El Ranchero, a hispanic corn-based food product company focused on tortilla chips, tostadas and related products was acquired.  Founded in 1970, the business has a well established brand and reputation for authentic Mexican products using no preservatives or additives.  Authentico Foods is the new holding company for Castro and El Ranchero.

Strategically, the acquisition adds size and scale as well as food products using complementary ingredients and manufacturing processes.  In addition, virtually all of the products are distributed to the same retail base enabling the combined business to have enlarged shelf space.  Customers include an array of national, regional and local grocery, discount and club stores.

Based in Cleveland, Ohio, KCP is a private equity fund focused on investing in the lower middle market.  KCP invests in niche manufacturing and value-added business service and distribution companies.  KCP has Midwestern values founded on the belief that strong relationships, discipline, experience and good judgement drive long-term investing success.         

Alejandro Castro, President of Castro, remarked, “We believe the combination of chips, tamales and masa products are a perfect fit and complement each other.  Our shared heritage, focus on natural ingredients and customer base will allow the two businesses to come together seamlessly.  Kirtland Capital is the best partner to provide the resources to grow the combined business.”

Tom Littman, President of KCP, shared, “Alex Castro has built a strong business with an excellent reputation and developed a business plan to integrate and grow the two businesses.  The opportunity is highly attractive to KCP, and we are pleased to be Alex’s partner.”

Riverside advised the shareholders of Castro through the entire transaction process.  Mr. Castro noted, “Riverside was a critical advisor in orchestrating a process to select a capital partner that fit culturally and has the vision to elevate the combined business. Riverside clearly understood the underlying businesses and the growth plan. The Riverside team helped me select a great partner.”

The transaction closed in May 2019. Riverside served as Castro’s exclusive investment banker. Drinker Biddle & Reath LLP served as the legal advisor to Castro, and Jones Day served as the legal advisor to KCP.

ABOUT RIVERSIDE ADVISORS

Riverside Advisors is a middle-market investment bank focused on family and entrepreneur-owned businesses. Led by professionals with more than 20 years of experience, Riverside is committed to meeting the unique needs of middle market companies and their owners. Services include sale advisory, acquisition advisory, readiness review and transaction planning, and capital raising.  Riverside is an affiliate of Plante Moran and P&M Corporate Finance (PMCF).

Riverside focuses on lower middle market transactions up to $25 million in value. Transactions in excess of $25 million are executed by PMCF.

John Ebe
Managing Director

312.602.3545
john.ebe@riversideadv.com

P.J. Brennan, CFA
Analyst

312.928.5301
p.j.brennan@riversideadv.com