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Martin Stein, Executive Director at Blackford Capital. Martin Stein, Executive Director at Blackford Capital.

Blackford Capital acquires Ellison Bakery via Michigan Prosperity Fund

BY Monday, April 24, 2017 05:00am

GRAND RAPIDS — Blackford Capital has entered the baking business.

The Grand Rapids-based private equity firm recently inked a deal to acquire a majority stake in Ellison Bakery, a manufacturer of cookies and other baked goods headquartered in Fort Wayne, Ind.

While the majority of Blackford Capital’s investments have focused on industrial products, the Ellison acquisition provides the firm an opportunity to expand into the growing food processing industry, according to Executive Director Martin Stein.

Ellison Bakery “dominates” the market for the cookies used in ice cream sandwiches sold by Mars Brands, Nestle and other large companies, Stein said. 

“A lot of ice cream cookie sandwiches are made in the U.S. and we handle a good portion of them,” Stein said. “But there are a lot of other neighboring product categories. There are all of these niches and pockets of this business — there are a lot of growth opportunities.” 

Specifically, Blackford Capital plans to use Ellison Bakery as a platform company to wrap in further acquisitions of industrial bakeries in adjacent industries, particularly in the gluten-free, nut-free and other ingredient-restrictive markets. 

Ellison Bakery generates annual revenues of approximately $50 million and employs 100 workers in Fort Wayne. 

Comerica Bank provided debt financing on the transaction.

The Ellis family opted to sell a majority stake in the bakery in a bid to fund the next stage of development at the company, and to distance themselves economically from the business, Stein said. 

Members of the Ellis family will still manage day-to-day operations at the company. 

Terms of the deal were not disclosed. 

Blackford Capital’s Michigan Prosperity Fund typically targets mature manufacturing companies that generate $20 million to $100 million in annual revenues and have had three consecutive years of profitability, as well as potential for high growth. The fund looks for companies whose owners want to sell but will stay on after the transaction to continue to manage the business.

The acquisition marks the ninth company added to Blackford Capital’s Michigan Prosperity Fund. The portfolio includes Grand Equipment Co., Dickinson Press Inc., Custom Profile, Quality Aluminum Products Inc., Burgaflex North America, Grand Transformers Inc., Mopec and Davalor Mold

The fund primarily focuses on Michigan businesses, but allows for limited investment in companies located in neighboring states, Stein said. 

“One of the big themes of our Michigan Prosperity Fund is Michigan investors investing in Michigan businesses,” he said. “We’ve talked about outside private equity funds coming into the state and making money off of Michigan businesses. This is unique opportunity for Michigan investors in a neighboring state.”

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