Golden State Foods, one of the world’s largest suppliers to fast-food restaurants, announced Lindsay Goldberg, a New York-based private equity firm, has entered into an agreement to acquire a controlling interest in the company from the Wetterau family. Details on the investment amount weren’t disclosed.
“It’s the right time given the current ownership’s decision to partially exit,” Chief Executive Brian Dick told the Business Journal. “We’re in the business of stability in ownership and leadership. We’re excited that the family is staying in to a significant degree.”
The investment comes a year after long-time Mark Wetterau, who served as chairman and CEO for 25 years, passed away from an illness. The company’s headquarters will continue to be Irvine, and Dick and the rest of management will continue in their current positions.
Stephen Wetterau and Conrad Wetterau will continue to serve on the board of directors, the company said.
“The Wetterau families look forward to strategically partnering with Lindsay Goldberg going forward and continuing to meaningfully engage in the future of GSF,” Chairman Conrad Wetterau said in a statement.
“Lindsay Goldberg’s relationship-driven business building approach and longstanding experience in the quick and limited service restaurant food supply chain make us uniquely positioned to partner with the Wetterau family and GSF management team,” Lindsay Goldberg partners Eric Fry and Peter Nurnberg said in a statement.
“We have tremendous respect for GSF and its talented, dedicated associates and look forward to our partnership with the entire GSF family.”
Family PE Firm
Lindsay Goldberg calls itself a “relationship-driven investment firm” that focuses on partnering with families, founders and management teams.
“The most important decision a family or founder makes for their business is identifying the right strategic partner,” co-founders Alan Goldberg and Bob Lindsay say on the company website. “Over the past 20+ years, we’ve built Lindsay Goldberg with the goal of serving as the absolute best partner for family- and founder-led businesses.”
Both founders have extensive backgrounds on Wall Street. Goldberg was chairman and CEO at Morgan Stanley Private Equity, which he co-founded along with Lindsay.
Since its founding in 2021, Lindsay Goldberg has raised $20 billion of equity capital and has invested in over 60 platform companies and over 300 follow-on opportunities.
One of its investments in 2005 was in Irvine-based Alliant Insurance Services Inc., one of the world’s largest insurance brokers. Lindsay Goldberg has exited its position, according to its website.
Lindsay Goldberg ranked No. 7 on the 2023 HEC-Dow Jones Private Equity Performance Ranking.
The annual assessment is based on a quantitative performance analysis of the world’s top private equity firms over a 10-year period. For the 2023 ranking, HEC analyzed comprehensive performance data from 632 private equity firms and the 1,241 funds they raised between 2010 and 2019.
After Golden State Foods hired Rothschild & Co as an adviser, the deal took about 10 months to complete, Dick said.
“We all enjoyed our conversations with Lindsay Goldberg,” Dick said. “We liked their values. They’re very careful with their reputations.”
GSF’s Future
Golden State Foods, established in 1947, became famous as one of the key suppliers to McDonald’s, helping the nation’s largest fast-food restaurant chain roll out products like the Big Mac sauce, the Triple Thick Shake syrups and McNugget dipping sauces.
GSF, as it is commonly called, was purchased in 1998 by the Wetterau family and the Los Angeles-based Yucaipa Companies, whom GSF bought out a few years later in 2004. Mark Wetterau in 2022 told the Business Journal that it picked GSF because “we loved tying ourselves to one of the best in the industry.”
Mark Wetterau started his career in 1980 with St. Louis-based Wetterau Inc., a family-owned food maker and distributor founded by his great-grandfather in 1869. He rose through the ranks to become chairman and CEO of Shop ‘n Save in 1987 and then president and chief operating officer at Wetterau, which was sold for $1.1 billion in 1992 to Minneapolis-based SuperValu Stores Inc.
Conrad Wetterau, along with his brother and former Wetterau Inc. associate Michael Waitukaitis, went on to form Wetterau Associates LLC to buy and manage businesses.
Their two biggest investments became Anheuser-Busch Companies LLC’s largest independent distributor in Massachusetts and GSF.
Mark Wetterau, who became the firm’s third CEO in its history, said culture was the key to its success.
“Culture is so important – what we represent, what we stand for. It’s the most powerful piece. Without the culture, the strategy and structure would not be as strong and as impactful.”
Nowadays, GSF is the fifth largest private company in Orange County, with an estimated $5 billion in annual sales.
It supplies food to 200 leading brands including KFC, Taco Bell and Wendy’s; altogether, these brands operate more than 125,000 restaurants or stores in over 50 countries.
Following Wetterau’s death, Conrad was elected to replace him as chairman and Dick became CEO.
The investment by Lindsay Goldberg will provide the company with additional resources and capabilities.
The private equity investment doesn’t mean the company will go into cost-cutting mode, Dick said. Rather, it’s planning to expand into new geographies and open new facilities.
“We’re not expecting our behavior to change,” he said. “We’re planning to grow all of our five businesses.”
The company decided to stay in Irvine because its core executive team is located in Southern California, Dick said.
