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Thursday, Mar 28, 2024

Valley Brand Involved in A Saucy Sale

Financial advisory Calabasas Capital has closed a deal to sell a brand with Valley roots: Bob’s Big Boy Salad Dressings and Sauces. The product line was sold by K.T.’s Kitchens in Carson to a new equity-backed LLC called The Flavor of California. Financial details of the transaction were not disclosed. For David Bonrouhi, managing director at Calabasas Capital, the deal presented a challenge because it’s a “carve out” of one product, rather than selling an entire company. He began working with Kathy Taggares, owner of K.T.’s Kitchens, last June. “Typically, when you sell a business line like this, you have to sell it to another existing company because the buyer isn’t getting any back office or infrastructure with the acquisition,” Bonrouhi said. “We originally thought it would be sold to another food company.” But there was a problem: K.T.’s Kitchens didn’t own the “Bob’s” brand — the owner of Bob’s Big Boy Restaurant Group did and still does. Taggares purchased Bob’s Kitchens, the business that made dressings and sauces for the restaurant chain, in 1987. Later, she developed a frozen pizza business that rapidly eclipsed the salad dressing operation in scale, so she decided to sell the Bob’s licensing agreement and its remaining 35-year term. Many potential buyers, especially food processing companies, pulled their interest when they found out the deal only included manufacturing and distribution rights but not ownership of the Bob’s brand. So Bonrouhi widened the search to include companies backed by private equity firms, which he said are strong buyers for this type of sale because they “have money, they’re aggressive, they’re motivated to buy, and they can recognize synergies.” Northern California firm Salt Creek Capital came to mind — Calabasas Capital nearly closed a sale with them last year. The firm’s strategy is to partner with executives who want to buy a small or mid-market business but don’t have capital. “We sought them out because we weren’t selling a business that had a built-in CEO or president. We know (Salt Creek) brings that to the table and allows this kind of carve-out to take place,” Bonrouhi said. “They’re basically bringing in the successor to run the business.” Salt Creek found that successor in Julie Pantiskas, an operational executive with more than 30 years of experience. The sale closed in January and last month Salt Creek and Pantiskas jointly formed The Flavor of California to assume the Bob’s license. Aside from Calabasas Capital’s involvement, the deal has a Valley connection in that the original Bob’s Big Boy restaurant was located in Glendale, and the oldest remaining location is at 4211 W. Riverside Drive in Burbank. Calabasas Capital offers securities through Fallbrook Capital Securities Corp., a member of the Financial Industry Regulatory Authority and Securities Investor Protection Corp.

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