KeHe Adds New Strategic Capital Partner

Natural and specialty foods firm KeHe Distributors has announced that it has received new investment from TowerBrook Capital Partners LP, an international investment management firm that works with purpose-driven companies.

TowerBrook has committed unspecified capital for future growth. The move comes as KeHe replaces a longtime minority shareholder.

“We have been very deliberate in selecting a partner that believes in our mission and values as well as our strategic vision to be the next-generation distributor in specialty, natural and organic and fresh foods,” said Brandon Barnholt, KeHE’s president and CEO, in a statement. “This arrangement allows KeHe to maintain our majority employee stock ownership ownership structure, while securing the infusion of capital we need to power our growth initiatives.”

KeHe is known for its expertise in bringing new and emerging brands to market through its retail distribution network that spans the U.S. and Canada, with an emphasis on natural, organic, specialty and fresh food products. KeHE also partners with online food distributors such as Thrive Market. 

“KeHe has significant scale, a differentiated supply chain and an experienced leadership team with both a strong track record and a compelling vision for the future of food distribution,” said Michael Recht, managing director of TowerBrook. “We are pleased to partner with KeHe to help drive continued momentum and growth in the business.”

TowerBrook recently became the first mainstream private equity firm to earn its B Corporation certification. Certified B Corporations are businesses that meet standards of verified social and environmental performance, public transparency and legal accountability to balance profit and sustainability.

KeHe became the first food distributor to earn the B Corporation certification credential, as reported by WGB in 2016, and remains one of the largest organizations to hold the sustainability certification.

“We see many exciting opportunities in this large and growing sector,” said Andrew Rolfe, managing director of TowerBrook. “Responsible investing is also an integral part of how we work. We are thrilled to partner with KeHe, as they share our commitment to values such as diversity, inclusion, service, transparency and sustainability.”

BMO Capital Markets acted as exclusive financial adviser to KeHE. Winston & Strawn LLP provided legal guidance.