Clayton Dubilier & Rice has agreed to acquire Shearer’s Foods, a contract manufacturer and private label supplier of snacks, from Ontario Teachers’ Pension Plan (Teachers).
Teachers first invested in Shearer’s Foods in November 2012 when it partnered with Wind Point and C.J. Fraleigh, the former CEO of Sara Lee North America, to acquire the business. In January 2015, Teachers increased its ownership in Shearer’s by purchasing additional equity from Wind Point.
Shearer’s is one of the largest contract manufacturers and private label suppliers of snacks in North America. Products include kettle cooked potato chips, traditional potato chips, tortilla chips, cheese curls and other extruded snacks, and corn chips, as well as cookies, crackers, and wafers.
Since Teachers invested in Shearer’s in 2012, the company has grown from 5 facilities to 17 facilities in 10 states and 2 provinces and has become one of the largest producers of private label and co-manufactured salty snacks in North America. Shearer’s is led by Executive Chairman Bill Nictakis and CEO Mark McNeil and is headquartered south of Akron in Massillon, Ohio.
“CD&R shares our focus and commitment, and their track record of helping build stronger, more sustainable businesses makes the firm an ideal partner as we continue to drive our business forward,” said Mr. Nictakis. “At the same time, I would like to express my gratitude to the Teachers’ team. Under their more than a decade of ownership, we have successfully grown our footprint and significantly diversified our offerings to our valued customers.”
“As Shearer’s enters a new phase of growth, we are excited to be joined by a team with the experience, expertise and resources to support our mission of producing high-quality, innovative and delicious snacks that we are proud to serve to our families, friends, customers and retailers,” added Mr. McNeil.
“Over the past decade, we have been proud to partner with the Shearer’s management team as it established itself as a market leader in North America for private label and contract manufactured salty snacks, cookies and crackers. Shearer’s has achieved this position by consistently delivering high-quality and innovative products, while expanding its market presence,” said Raymond Shiu, a managing director at Teachers.
“We have deep admiration and respect for Shearer’s, a leading business that shares our core values in a sector and operating model we know and understand well,” said John Compton, a CD&R operating partner and former president of PepsiCo and CEO of PepsiCo North America, including the Frito-Lay, Quaker and Pepsi beverage divisions. “We are thrilled to be partnering with Bill and Mark to build on Shearer’s history of success in serving great-tasting snacks.”
New York and London-based CD&R invests in European and United States-based businesses. Since its founding in 1978, the firm has invested more than $40 billion in over 100 companies across a range of industries including industrials, healthcare, business services, consumer, technology and financial services.
“We have strong conviction in the differentiated manufacturing capabilities and category management the company provides, and our goal is to support the team in further scaling operations and capturing the many opportunities ahead to better serve Shearer’s customers,” said J.L. Zrebiec, a CD&R partner.
Headquartered in Toronto, Teachers is one of Canada’s largest and most active pension investors with C$250 billion in assets under management. The group has additional offices in London, Hong Kong, Singapore, Mumbai and San Francisco.
Deutsche Bank, UBS Investment Bank, BMO Capital Markets, BNP Paribas, RBC Capital Markets and TD Securities provided financing and served as financial advisors to CD&R on this transaction.
Goldman Sachs was the financial advisor to CD&R, and Blue Owl Capital and Goldman Sachs Bank provided financing to support the acquisition of Shearer’s.
© 2023 Private Equity Professional | December 15, 2023
