Bringing high quality, savory flavoring solutions to the table
Revela Foods is a leading ingredient, seasonings and flavorings developer and manufacturer in the US. With extensive in-house R&D capabilities, Revela provides its customers a full-service diversified offering from product development through final B2B manufacturing. The company is well known for its strong market position as the leading provider of liquid mac-n-cheese pouches to grocery retailers and their co-packing partners.
Founders cared deeply about partnership
Revela’s roots go back to two strong Wisconsin-based businesses – Welcome Dairy and Gamay Foods – that merged in 2016. The combined four founders cared deeply about the business, including the role the company played in their local communities. While they wanted some liquidity and a plan towards retirement, they cared about who their partner would be. They did not want a private equity partner to negatively impact their company’s culture or its communities.
In June 2019, we invested with Revela’s founder-owners in our Private IPO® solution, providing shareholders both partial liquidity and a sizeable reinvestment. Importantly, our solution enabled the founders to keep control of their board and their future growth plans. They had a new partner for strategic growth, but they kept their hands on the wheel.
Strong fundamentals supported investment thesis
Often the provider of the core flavoring or seasoning in the end food product, Revela played an essential role in the value chain for retailers and branded food manufacturers. Their proprietary, owned-formulations led to long-term customer relationships with strong recurring revenue trends. Moreover, their end products held strong market share in the counter-cyclical “center of the store,” and they were great partners to grocers looking to grow and enhance their private label product offerings. All these factors supported strong long term growth trends in all economic cycles.
Leadership team additions, M&A and strategic rebranding drove significant equity value creation
Revela’s leadership had a strong strategic growth plan and wanted to build out a broader team to achieve its objectives. Coordinated with the retirement of certain founders, the board hired a new COO and a new CFO, both with decades of food manufacturing experience. The new COO played an integral role in new operational initiatives to drive improved gross margin, and helped integrate a new add-on acquisition completed in 2021, bringing in-house new spray drying capabilities that the company historically outsourced. To ensure the market fully understood the company’s distinct product offering, the company underwent a strategic rebranding exercise in 2022, moving from the original Welcome Dairy and Gamay brands to Revela Foods. The new brand highlighted the company’s broader capabilities in B2B ingredients and helped fully integrate the organization under one brand and go to market strategy. Working collaboratively, the board achieved its strategic plans, elevating Revela Foods as a leader in its market.
Outcome
A strong strategic buyer for a great strategic asset
After successfully doubling EBITDA and solidifying its position as a leading savory ingredient manufacturer, Revela Foods was sold to Archer Daniel Midland, a large and diversified food company, in January 2024. Revela’s founder and CEO stayed on to continue the company’s strategic growth plan with the new buyer.
