Cherry Tree Advises Koch Industries

Cherry Tree Advises Koch Industries

Koch Industries

Cherry Tree Advises Koch Industries on their Sale Process

IntegritySolutions

“Cherry Tree was instrumental in gauging the market and determining values and how to make a transaction successful in a difficult environment.”

— Rod Garbe, Chief Operating Officer and Chief Financial Officer, Koch Industries, Inc.

INDUSTRY:
Consumer Products

DESCRIPTION:
Koch Industries is a premier provider and merchandiser of rope and twine, chain and wire rope, and related hardware products

HQ LOCATION:
Minneapolis, MN

TRANSACTION TYPE:
100% Sale to Hillman Solutions Corp.

Transaction

In January 2024, Koch Industries, Inc. (“Koch” or the “Company”) was acquired by Hillman Solutions Corp. (“Hillman”) (Nasdaq: HLMN), a leading provider of hardware products and merchandising solutions. This acquisition marks the entrance into rope and chain, a new product category for Hillman.
 
The Company’s 2,300 SKUs are in the complex, high-touch, rope and chain and associated hardware category which is a perfect addition to Hillman’s existing 112,000 SKU-portfolio. Koch’s customers include local and national retailers in the traditional hardware and farm and fleet channels based in the United States, and during its fiscal year ended May 31, 2023, Koch’s revenue totaled approximately $45 million. Financial terms of the transaction were not disclosed.

Koch Industries was founded by Randy and Dave Koch, entrepreneurs who have successfully built numerous companies.

Cherry Tree’s Role

Cherry Tree was engaged to advise the Company on the sale of the business. This included leading a competitive process to identify potential buyers and secure offers. Cherry Tree’s role included preparing evaluation material, communicating with target buyers, soliciting offers, negotiating terms, and supporting due diligence.

About Koch Industries, Inc.

Koch, a Minnesota based company established in 1978, is a premier provider and merchandiser of chain, rope, wire rope, hardware, load binders, cable pullers, 3-point hitch, trailer jacks and garage organization products.

While Koch was first established as a distributor of wire rope to farm stores, it successfully expanded its customer base to home improvement, hardware, and other retail market channels. In 2017, Koch Industries acquired Lehigh Consumer Products, LLC, now fully operating under Koch Industries, Inc. For more information visit www.kochmm.com

About Hillman Solutions Corp.

Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman Solutions Corp. and its subsidiaries are leading North American providers of complete hardware solutions, delivered with outstanding customer service to over 40,000 locations. Hillman designs innovative product and merchandising solutions for complex categories that deliver an outstanding customer experience to home improvement centers, mass merchants, national and regional hardware stores, pet supply stores, and OEM & industrial customers. Leveraging its leading distribution and sales network, Hillman delivers a “small business” experience with “big business” efficiency. For more information on Hillman, visit www.hillmangroup.com.

About Cherry Tree & Associates

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies. Additionally, it conducts private placements for high quality, entrepreneurially managed growth companies, provides strategic advisory services for CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC

Cherry Tree Advises Vexilar and AWC Distributing

Cherry Tree Advises Vexilar and AWC Distributing

Vexilar and AWC Distributing

Cherry Tree Advises Vexilar and AWC Distributing on their Sale to Rob Jablonski and Valiant Wealth

“The Cherry Tree team worked tirelessly, gathering information to set up a presentation for potential buyers to see. Team members were always available and quick to respond to any questions we had. Cherry Tree was with us from the beginning of the process to the end, ready to help us in any way they could, to a successful closing on the sale of our companies.

Even though it was a lot of hard work for Cherry Tree and ourselves, we also had some fun along the way!”

— Steve and Robin Baumann, Owners, Vexilar and AWC Distributing

INDUSTRY:
Consumer Products

DESCRIPTION:
Vexilar and AWC Distributing develop and sell products to the ice fishing market

HQ LOCATION:
Bloomington, MN

TRANSACTION TYPE:
100% Sale to a private investor and financial buyer

Transaction

In October 2023, Vexilar and AWC Distributing (the “Companies”) were acquired by Rob Jablonski and Valiant Wealth. The Companies are headquartered in Bloomington Minnesota.

Vexilar is a renowned technology company specializing in advanced ice fishing sonar, underwater cameras, and related fishing products for anglers and outdoor enthusiasts. AWC Distributing is an innovative ice fishing equipment provider, specializing in ice augers designed for modern high powered cordless electric drills.

Cherry Tree’s Role

Cherry Tree was engaged to advise the companies and their shareholders in identifying the best partner to transition the business to, managing the process, and completing the sale. It was crucial to the shareholders that the Buyer be able to continue the long tradition of delivering market-leading products, excellent customer service and a great work environment for employees. Cherry Tree’s role included preparing evaluation materials, communicating with the Buyers, soliciting proposals, negotiating terms, supporting due diligence, and facilitating the closing of the transaction.

About Vexilar

Vexilar is a dynamic and innovative technology company specializing in advanced sonar and fish-finding solutions for anglers and outdoor enthusiasts. With a rich heritage in the fishing and marine industry, Vexilar has become a trusted name in the ice fishing industry, offering a range of cutting-edge products designed to enhance the fishing experience. Its state-of-the-art sonar technology provides anglers with real-time, precise information about the underwater environment, helping them locate fish and optimize their fishing strategies.

About AWC Distributing (d/b/a K-Drill Ice Augers)

K-Drill is a renowned and leading manufacturer in the field of ice fishing equipment, specializing in innovative ice augers designed to revolutionize the way anglers drill holes through the ice. The drills are designed for modern high powered cordless electric drills and have a strong focus on quality, efficiency, and user-friendly design.

About Valiant Wealth

Valiant Wealth is a distinguished financial services firm dedicated to providing personalized wealth management and investment solutions to discerning clients. With a steadfast commitment to financial excellence and a client-centric approach, Valiant Wealth empowers individuals and businesses to achieve their financial goals and secure their financial futures.

About Cherry Tree & Associates

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies.  Additionally, it conducts private placements for high quality, entrepreneurially managed growth companies, provides strategic advisory services for CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC

Cherry Tree Advises Hearing Components (d.b.a ComplyFoam)

Cherry Tree Advises Hearing Components (d.b.a ComplyFoam)

Hearing Components

Cherry Tree Advises Hearing Components (d/b/a ComplyFoam)

INDUSTRY:
Consumer and Industrial Products
DESCRIPTION:
Leading Manufacturer and Distributor of Audio Enhancement and Hearing Products
LOCATION:
Oakdale, Minnesota
TRANSACTION TYPE:
100% Management Buyout

Situation:

In July 2023, the owners of Hearing Components (doing business as Comply) sold the company to CEO Chris Hudson and an investor group. Hearing Components was owned and founded by Robert and Dee Oliviera, who originally purchased the intellectual property from 3M in 1990.

Cherry Tree’s Role:

Cherry Tree was engaged to help the owners evaluate their strategic alternatives, which included seeking parties that would maximize the proceeds for a foundation they started, while also protecting the culture of the Company, supporting growth initiatives, and continuing to provide excellent products to its customers. Cherry Tree advised the Company through a process that included introductions and discussions with numerous potential industry and financial acquirers, soliciting proposals, negotiating terms, supporting due diligence, and facilitating the closing of the transaction by ultimately striking a deal with the management team and an investor group they formed. Chris Hudson’s experience and vision for the future of the business as well as his shared value and commitment to all stakeholders, made him the ideal steward for the Company.

About:

Hearing Components: Founded in 1990, Hearing Components is a leading manufacturer and distributor of patented and proprietary audio enhancement and hearing health products designed for performance and comfort. The products are highly-rated and compatible with over 95% of consumer brands while its high-noise products have been trusted by military forces for over 20+ years. The Company distributes globally.

About Cherry Tree & Associates:

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies. Additionally, it conducts private placements for high quality, entrepreneurially managed growth companies, provides strategic advisory services for CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC

Cherry Tree Advises InHarvest on its Sale to Riviana Foods

Cherry Tree Advises InHarvest on its Sale to Riviana Foods

InHarvest

Cherry Tree Advises InHarvest, a Duininck Company, on its Sale to Riviana Foods

“We engaged Cherry Tree after being approached by a strategic buyer who expressed interest in acquiring InHarvest, a Duininck Company. Cherry Tree had served as our advisors several years ago on an acquisition for InHarvest.
 
The Cherry Tree team led the efforts to negotiate a Letter of Intent with Riviana, coordinated and managed the due diligence process and managed the overall process of negotiating and completing the necessary legal agreements for closing the sale of InHarvest and the related real estate.
 
Cherry Tree’s experience and involvement in managing and driving the process through closing resulted in a great outcome for the shareholders of InHarvest.”

—Trevor Duininck, CEO Duininck Companies

INDUSTRY:
Food Manufacturer, Consumer
DESCRIPTION:
Producer and procurer of premium specialty rice, quinoa, and grains for the foodservice, industrial, and retail sectors
LOCATION:
Colusa, CA & Woodland, CA
TRANSACTION TYPE:
Sale to Riviana Foods Inc., a wholly-owned subsidiary of Ebro Foods, S.A. (BME:EBRO)

Transaction Overview

Riviana Foods, North America’s largest processor, marketer and distributer of branded and private label rice products, acquired the assets of InHarvest, a leading producer of premium specialty rice, quinoa and grains for the foodservice, industrial, and retail sectors, for $48.75 million.

The acquisition expands Riviana’s operations and geographic footprint into California and includes two production facilities in Colusa and Woodland strategically located in the rice-growing area of the Western United States. In addition, with InHarvest’s focus on the foodservice, ingredients/industrial and retail/private label sectors, the purchase complements and enhances Riviana’s current business in those segments.

“The acquisition of the InHarvest business is an excellent fit and consistent with our strategic plan to expand our position in the specialty value-added rice, quinoa and grains markets,” said Enrique Zaragoza, President & CEO of Riviana. “We are excited about this expansion as we also look forward to welcoming InHarvest’s employees to the Riviana team.”

Cherry Tree’s Role:

Cherry Tree was engaged to advise InHarvest and its shareholders as they considered an unsolicited bid from a strategic party seeking to acquire the business. The objectives were to maximize shareholder value and terms of a transaction, while managing an efficient closing process. The Cherry Tree team advised the shareholders throughout the entire process, which included soliciting the LOI bid and negotiating terms, supporting the Company in the confirmatory due diligence process, negotiating terms of the purchase agreement and managing the overall process of closing the transaction.

About InHarvest, Inc.:

With two facilities in California, InHarvest is the foremost U.S. producer and procurer of some of the world’s most distinctive varieties of grains, beans, legumes and blends for the foodservice, industrial and retail sectors. The company’s dedication to discovering and promoting lesser-known, heirloom grains and seeds is deep-rooted in its over 40-year heritage of providing inspiration and solutions to an evolving food industry. For more information, visit www.InHarvest.com.
 

About Riviana Foods Inc.:

Riviana Foods Inc. is North America’s largest processor, marketer and distributor of branded and private label rice products through its family of well-known brands including Minute®, Mahatma®, Success®, Carolina®, Comet®, Adolphus®, Blue Ribbon®, RiceSelect®, Gourmet House® and Tilda®. Riviana also processes, markets and distributes fresh pasta through the brand Olivieri®. Headquartered in Houston, Texas, Riviana is a wholly-owned subsidiary of Ebro Foods, S.A., a leading Spanish food company and the world leader in the rice sector. For more information, visit www.riviana.com.
 

About Cherry Tree & Associates

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies. Additionally, it conducts private placements for attractive, entrepreneurially managed growth companies, provides strategic advisory services to CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC

Lectric/Bertram

Lectric/Bertram

Lectric eBikes

Cherry Tree Advises Lectric eBikes on an Investment by Bertram Capital

INDUSTRY:
Consumer​
DESCRIPTION:
Rapidly Growing Provider of eBikes
LOCATION:
Phoenix, Arizona
TRANSACTION TYPE:
Recapitalization and Growth Capital

Overview:

In December of 2020, Lectric eBikes, one of the largest and fastest growing designers and direct-to-consumer retailers of electric and pedal-assist bicycles, announced that it had received an investment from Bertram Capital, a growth equity investor specializing in backing high growth consumer products companies. The rationale for the investment is to capitalize on the company’s rapid growth and strong demand, and to invest in inventory, marketing, and Lectric’s ecommerce platform.
 
Cherry Tree was engaged to help the founders identify the best partner to support the company’s rapid growth and consummate a recapitalization with a growth capital investment. The Cherry Tree team advised the founders in a process that included effectively communicating this compelling investment opportunity to potential investors, engaging with a wide range of qualified parties, soliciting term sheets and negotiating attractive terms, and supporting the company in working through the diligence process and finalizing the definitive agreements.
 
Levi Conlow and Robby Deziel, Lectric co-founders, stated, “With this investment from Bertram Capital, we are thrilled to have a partner who is a leader in the ecommerce sector and brings the resources to help us achieve our vision of building great bikes for millions of people at accessible prices, while maintaining industry leading customer service.”

Lectric was advised by Cherry Tree & Associates, LLC, due to its specialization in serving high growth consumer products companies. Taft, Stettinius, and Hollister LLP served as Lectric’s legal counsel.

About Lectric eBikes

Lectric eBikes: Lectric is the among the largest and fastest growing e-bike brands in the United States. Lectric’s bikes feature functional designs, brand name components, and a growing complement of accessories. The XP, Lectric’s flagship model, has been widely praised as the best e-bike under $1,000. The Company sells all of its bike models directly through its website, and customer questions and feedback are addressed by a knowledgeable US-based customer service team. Lectric was founded in 2018 by Robby Deziel and Levi Conlow, and is based in Phoenix, Arizona.  For more information, visit the Company’s website at www.lectricebikes.com.

About Bertram Capital

Bertram Capital: Bertram is a private equity firm targeting investments in lower middle market companies. Since its inception in 2006, the firm has raised over $1.7B of capital commitments. In addition to supplying strategic growth capital, Bertram Capital leverages proprietary processes and services, Bertram High-5 and Bertram Labs, to empower its portfolio companies to unlock their full business potential. The Bertram High-5℠ is an operationally-focused value creation strategy, which includes management augmentation, operational initiative implementation, complementary business acquisition, sales and marketing improvements, and leveraging technology and IP. The cornerstone of this strategy is Bertram Labs, its in-house technology team, which drives growth and value through digital marketing, e-commerce, big data and analytics, application development, and internal and external platform optimization. Visit www.bcap.com for more information.

About Cherry Tree & Associates

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies. Additionally, it conducts private placements for attractive, entrepreneurially managed growth companies, provides strategic advisory services to CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC