Tecum Capital has made an investment in DelGrosso Foods, one of the oldest family-owned producers of pasta sauce in the United States.
DelGrosso specializes in the formulation and manufacture of branded, private label, and co-manufactured tomato-based sauces for pasta, pizza and salsa. The company’s original, organic and ultra-premium products – sold under the “DelGrosso” and “La Famiglia DelGrosso” brands – are distributed nationally and internationally, and its private label and co-manufactured products are sold to half of the top 20 grocers in America and several national brands. DelGrosso operates a 130,000 square foot manufacturing facility located 100 miles east of Pittsburgh in Tipton, Pennsylvania.
Founded in 1947 by Ferdinand and Mafalda DelGrosso, the company is today led by CEO Joe DelGrosso, a second-generation family member and the son of the founders.
In April 2021, DelGrosso was awarded $1.5 million from the Commonwealth of Pennsylvania to assist in the redevelopment of an Altoona, Pennsylvania-based 166,000 square foot facility that the company acquired in March 2019. The new facility provides DelGrosso with expanded warehousing and future food manufacturing capabilities.
Tecum partnered on this transaction with a local banking syndicate led by Indiana, Pennsylvania-based First Commonwealth Bank. The investment from Tecum and the banking group will be used to convert the Altoona facility and the expanded manufacturing space, which will include a new sauce manufacturing line, will allow the company to more than double its production capacity.
“We’ve made numerous additions to our existing Tipton sauce plant over the decades, adding warehousing space and expanded production capacity where we could,” said Mr. DelGrosso. “In order to continue to grow, our only option at this point is to add a second facility. It’s the largest step in the history of the family business since my parents packed those first cans of sauce over 70 years ago.”
“DelGrosso represents another opportunity to partner with a passionate and proven management team alongside an experienced senior lending syndicate right in our back yard,” said Stephen Gurgovits, Jr., the managing partner of Tecum. “Further, we are very bullish on the co-manufacturing industry within durable food product categories around the country and we believe DelGrosso to be a world-class food co-manufacturer. In addition to supporting the management team, we could not be happier to have the ability to support regional job growth, as it is a core part of Tecum’s investment strategy.”
The First Commonwealth Bank syndicate includes S&T Bank, Tri-State Capital Bank, Somerset Trust Company, Reliance Bank, and Washington Financial Bank.
“The historical durability of the business, along with current organic growth initiatives and industry tailwinds gets the team excited,” said Matt Harnett, a partner at Tecum. “Tecum is thrilled to partner with DelGrosso in its next phase of growth.”
In addition to Mr. Harnett, the Tecum transaction team included Vice President Sean Edmonson, Associate Ian Frazier, and Senior Analyst Matt Sweet.
Headquartered near Pittsburgh in Wexford, Pennsylvania, Tecum invests both junior capital and equity of $5 million to $20 million in companies that have EBITDA greater than $3 million and are active in the high-value manufacturing, value-added distribution, and business service sectors.
Tecum’s investment in DelGrosso was made through Tecum Capital Partners II LP, a $265 million SBIC fund that was raised in 2017.
© 2021 Private Equity Professional | July 9, 2021
