Liberty Distribution Company LLC

Growth recapitalization in partnership with management for largest confection distributor to non-food retailers

• Overview:
  • Liberty pioneered the direct-to-store distribution of confections and snacks to non-food retailers in 1998
  • Founder desired liquidity to diversify net worth but wanted to remain with the Company after the transaction
  • Senior management team wanted equity ownership as part of Founder’s transition
  • Founder agreed to growth recap led by Cave Creek Capital in 2007; transaction completed in 2008
  • Cave Creek Capital saw substantial new growth opportunities driven by increasing retailer interest in launching/expanding confection category in checkout aisle
  • Compelling market dynamics and committed management team created substantial interest from lenders, resulting in several term sheets with attractive terms despite turbulent credit market conditions
• Post-transaction actions taken to create value:
  • Expanded borrowing capacity to facilitate future capital needs due to projected aggressive growth
  • Significant ownership/incentives which motivated employees
  • Brought sales force “in-house”
  • Hired additional senior executives
  • Created “forward-looking” reports and enhanced Management information/sales systems to monitor progress and pursue more prospective accounts
  • Assisted in execution and funding of acquisition of major competitor
• Results:
  • Management owned large minority position
  • Conservatively capitalized balance sheet to fund future growth
  • Expanded customer base – sales increased over 100% in two years
  • Expanded employee base by over 30%
  • Industry leadership position has been significantly enhanced
  • Recapitalized in 2010 allowing management to repurchase majority stake