Falconhead Capital Acquires Multi-Flow Industries

By Laura Cooper for LBO Wire


12/14/2015--Falconhead Capital LLC said it has invested in Multi-Flow Industries LLC, a provider of fountain beverage solutions to the East Coast of the United States.

Janney Montgomery Scott LLC , ran the sale process for the Huntingdon Valley, Pa.-based beverage company, according to David Moross , chairman and chief executive of Falconhead.

Mr. Moross said that the addition of Managing Director Robert Fioretti to Falconhead's ranks in June helped to close the deal because of his personal relationship with the company's former private equity backers.

Multi-Flow was previously backed by Philadelphia-based CMS Small-Cap Private Equity Fund, a unit of the CMS Companies, which recapitalized the company in June 2008, according to a press release at the time.

The company provides fountain beverage solutions in the U.S., including branded and private label concentrated iced teas, juices, carbonated soft drinks, energy drinks and fortified functional water in-bag-in-the box packages. The company has 4,000 retail accounts including bars, restaurants, clubs, hotels and assisted living and nursing communities, according to a statement by Falconhead about the purchase.

The company's current CEO, Ken Schnarrs and his management team will continue to lead the company under its new PE ownership. The amount of Falconhead's investment was not disclosed, although the firm typically seeks to invest $10 million to $100 million of equity per platform, according to its website.

The sponsor is eager to add-on to Multi-Flow's base, said Mr. Moross, who mentioned that Falconhead is already "in conversations" about possible add-on acquisitions for the company. He noted that purchases that would expand Multi-Flow's reach, including buying routes and customer bases, are top-of-mind for the firm. Expanding in adjacent geographies, such as the Midwest, are also areas of focus.

"We hope that within three years we will be operating in every state," Mr. Moross said, adding that the company serves both the street and care divisions. The care division, which encompasses nursing homes, prison systems, hospitals and schools, is an area where Moross aims to grow Multi-Flow's presence.

Under CMS's ownership, Multi-Flow purchased one of the largest independent fountain-dispensed beverage distributors in Ohio in June 2013. The purchase helped bolster distribution in southern Ohio and Northern Kentucky.

Falconhead retained Greenberg Traurig LLP as its legal advisor and Grant Thornton LLP as its financial and tax advisor.

New York-based Falconhead manages $400 million of assets and generally invests in consumer-focused businesses in the sports, media & entertainment, food & beverage, recreational equipment & apparel and consumer services sectors.

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