Daily Newsletter

28 September 2023

Daily Newsletter

28 September 2023

Gehl Foods owner Wind Point ‘exploring sale of US dairy business’

Private-equity firm Wind Point Partners acquired Gehl in 2015.

Simon Harvey September 27 2023

Gehl Foods’ owner, private-equity firm Wind Point Partners, is reportedly exploring a sale of the US aseptic products manufacturer.

A potential deal could fetch more than $600m, including debt, Reuters suggested, quoting sources familiar with the proceedings, who said Gehl has hired William Blair and Bank of Montreal as financial advisers for the sale process.

The news agency’s sources said potential buyers for Wisconsin-headquartered Gehl may include other private-equity companies, but stressed talks over a possible purchase of the dairy business may not conclude in a deal.

Wind Point acquired Gehl, which trades as Gehl Food and Beverage, in 2015 for an undisclosed sum. The co-manufacturer produces sauces, desserts, soups and broths, as well as coffee creamers and a range of drinks.

The beverages portfolio includes ready-to-drink dairy products, milk alternatives made from oats, soy and almonds and also wines and spirits.

Gehl operates out of three manufacturing facilities: Lathrop, California; Walterboro, South Carolina; and Germantown, Wisconsin.

Just Food has approached Wind Point and Gehl for comment on the potential sales process.

Reuters’ sources suggested a deal for Gehl could garner a valuation of ten times its annual EBITDA, which they put at $60m.

The business was founded in 1896 by J.P. Gehl and in the 1970s started to focus on the aseptic dairy segment, supplying retail and foodservice with its own namesake brand, and also private-label customers and contract manufacturers.

Gehl’s LinkedIn page says the business serves more than 2,000 US retailers and “several global brands”.

It is led by CEO Craig Lemieux, the former president of US food company TreeHouse Foods.

In 2018, the company acquired California Natural Products (CNP). That company supplied dairy-based and dairy-alternative beverages, soups, broths, teas, nutritional drinks, and wine and spirits, all in Tetra Pak cartons. It also manufactures speciality rice and soy-based ingredients for consumer food brands.

The dairy and soy food sector will see rising demand for lactose-/gluten-free products

GlobalData estimates that the global dairy & soy food sector will grow at a CAGR of 17% during 2022–27. The healthy eating trend has encouraged consumers to seek alternatives to traditional dairy products. Plant-based dairy alternatives are often perceived as healthier due to their lower saturated fat content. Moreover, increasing awareness about food allergies and intolerances, coupled with consumers’ interest in alternative diets, will drive manufacturers to launch lactose- and gluten-free products.

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