The Food Partners

Acquisitions are a critical component of many of The Food Partners' (TFP) clients' growth strategies, as the right acquisition can result in improved returns, significant synergies, entry into new markets, an ability to leverage ever increasing overhead costs and create a higher profile with key stakeholders. Acquiring a top performing company can provide a low risk path to enhancing shareholder value. Acquiring assets out of bankruptcy may provide the opportunity to pay the right price and leverage synergies for higher than average returns.

Successfully acquiring another company requires a significant amount of planning, screening, analysis, negotiating and documenting. Few companies have trained professionals on staff to plan and execute acquisitions. TFP has dedicated, experienced acquisition professionals who are in the marketplace on a daily basis negotiating with potential buyers and sellers, have detailed knowledge of industry transactions and have developed and executed dozens of successful acquisitions on behalf of clients. This experience adds value at every stage of the acquisition process.

In addition, TFP utilizes several unique tools and skills to help ensure a successful acquisition. For instance, TFP’s “Fit Chart” analysis is a key starting point to the process. The “Fit Chart” is a proprietary tool designed to sift through the diverse characteristics of potential acquisition targets by utilizing a methodical process of analyzing and ranking targets to focus management’s acquisition strategy on those with the best overall fit. Likewise, TFP’s due diligence services are unsurpassed in the food industry. Experience from hundreds of food related transactions provides clients the comfort that all industry specific issues will be addressed and all material risks identified. Lastly, TFP believes monitoring both the integration process and post acquisition performance is integral to securing expected value. TFP’s analytical expertise and monitoring tools help ensure results meet expectations and return on investment targets are achieved.

These services do more than help clients manage searches and execute transactions. They help clients develop acquisition strategies, build consensus among key stakeholders, assess and quantify potential risks and rewards and evaluate the ultimate success of an acquisition for both internal management and external stakeholders, including capital sources.

Further, internally managed acquisitions can require an extensive amount of management's time and effort which is often diverted from, or added to, already significant responsibilities in the operation of the business. Employing TFP’s resources effectively minimizes the disruption to management, providing them time to stay focused on the business at hand.

Timing
TFP’s "Fit Chart" analysis typically takes 4 to 6 weeks for completion.
TFP’s acquisition process typically takes 18 to 30 weeks for completion.

Fee Schedule
"Fit Chart" analysis fees are based on either an hourly or flat rate fee.
Acquisition fees are based on either a percentage of the consideration paid or a flat rate.

Case Study

Background
A national leader in grocery distribution with a growing presence in value retailing faced the impending bankruptcy of former retail customer. The distributor, which had a long history with the customer, was certain of two things: It wanted to continue selling groceries to the customer, but it did not want to operate most of the stores.

TFP had been evaluating a number of distressed opportunities for the distributor in other parts of the country. The distributor’s former customer looked like an ideal opportunity to implement TFP’s suggested strategy - gain control of distressed retail assets and secure a long term supply arrangement, stabilize the capital structure of the customer and put good independent operator(s) into the stores to operate the stores for their own benefit.

Results
After TFP and the distributor conducted extensive due diligence and negotiations with the retailer and its advisors, a bid was submitted at public auction for all 66 of the customer’s then operating store assets with the right to reject up to 26 of the stores with no adjustment in purchase price. Ultimately, the distributor secured the right to reject 30 stores. At closing, 36 stores were purchased directly by independent retailers and chains with the distributor never entering the chain of title to the assets. As a result of the transactions, the distributor garnered wholesale volume of $125 million per year with a nominal effective investment.