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In June 2010, Chicago, Illinois-based Arbor Investments sold its Fund I portfolio company Great Kitchens, Inc. to Aryzta AG (SIX: ARYN) for US$180 million, in a transaction that generated an IRR of 69% and produced 17 times its original investment. Arbor’s food and beverage private equity focus provided a natural advantage in the Great Kitchens deal.  The firm recognizes the potential of companies, like Great Kitchens, that are able to deliver a compelling value proposition while simultaneously appealing to the increased sophistication of the mainstream American palate. 

When Arbor acquired the Company in October 2004, it operated from a cramped 40,000 sq. ft. facility in Addison, IL.  Arbor Senior Operating Partner Dennis Malchow, former CEO of Martin-Brower Company and executive at Oscar Mayer, took over as President of Great Kitchens at the time of the investment, and a period of dynamic change and growth ensued. 

A new brand identity was created that elevated the professional presence of the Company.  Sales efforts were refocused to the area of greatest opportunity – Take and Bake pizza, a double-digit growth category that Great Kitchens came to dominate.  Over the next five years, the Company achieved sales penetration in 9 of the 16 largest retailers in North America, while revenue and EBITDA grew four-fold and eight-fold, respectively.  The Company has been honored with numerous retailer Supplier of the Year awards, underscoring the valuable partnership that Great Kitchens has built with its customers.

Great Kitchens’ growth would not have been possible without Arbor’s $30 million investment in a 155,000 sq. ft. state-of-the-art plant and related equipment, newly constructed in Romeoville, Illinois.  The Company achieved SQF Level 3 certification and emerged as the largest Take and Bake pizza manufacturer in North America.  When Arbor acquired Great Kitchens it had 233 employees.  By the time the Company was sold to Arzyta in mid-2010, Great Kitchens’ Illinois work force had increased to 670 employees.