Industry News

Private Equity Firm Acquires Nutritional Food Distributor

Castle Harlan, Inc., a New York-based middle-market private equity firm, acquired Gold Star Foods, Inc., an Ontario, Calif.-based nutritional food distributor to K-12 schools in California, Arizona and Nevada. The seller was Chicago-based private equity firm Prospect Partners.

Gold Star Foods serves 380 school districts comprised of more than 3,500 schools. Gold Star Foods' proprietary software platform and expertise in USDA commodity tracking provides a valuable service to schools, which receive reimbursements from federal and state governments based on compliance with strict and increasingly complex regulatory standards. Gold Star Foods purchases products from more than 600 food manufacturers and farms and sells over 6,000 products of fresh bread and produce, as well as refrigerated, frozen and dry menu items.

"Gold Star is a proven leader in the stable and moderately growing school food distribution market, and it promotes healthy nutritional meals to its customers," says Bill Pruellage, co-President of Castle Harlan. “Gold Star has the scale to acquire smaller competitors in a fragmented market, as well as to expand into newer territories, such as Northern California and other Western states, additional product lines and new end-markets."

"There are many trends favorable to the school foodservice distribution industry, including increasing awareness of the importance of nutrition in school breakfasts and lunches, continued population growth and increasing federal funding for programs supporting better nutrition in school meals,” says Joyce Demonteverde Schnoedl, vice president of Castle Harlan. “[It] has excellent management with deep experience in the school food distribution industry. The team will remain in place.”

"Gold Star's management team has an average of 25 years of industry experience," Pruellage says. "Under the leadership of CEO Dan Madsen, the company has transitioned to a new state-of-the-art distribution facility and IT platform, completed and integrated a strategic acquisition and significantly expanded Gold Star's business with many of its existing customers."

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