Chefs' drops $54.3 million on Ohio meat and seafood

Since it went public a year ago, Ridgefield-based The Chefs' Warehouse Inc., has been putting its money to use through acquisitions, including a $54.3 million purchase of Ohio-based Michael's Finer Meats this week.

Chefs' Warehouse went public in July of last year, raising net proceeds of $63.1 million. After using the money to strengthen its balance sheet, executives have been aggressively cracking open new markets and dropping new products into Chefs' pantry, making three purchases since the initial public offering and four in a little more than a year, when the $9 million June 2011 purchase of Harry Wils and Co., is included.

Michael's is expected to contribute 6 to 8 cents annually to diluted earnings per share. The Ohio meat and seafood purveyor has annual revenue of about $80 million, Chefs' reported earlier this week.
Shares in Chefs' have been on a five-day winning streak since the announced Michael's acquisition, moving from $14.42 at the beginning of the week to closing at $15.68 on Friday. Overall, however, Chefs' shares have not reclaimed the highs of last year, when they were trading at more than $16 in August.

We are excited to have Michaels join the Chefs' Warehouse family, said Chris Pappas, Chefs' CEO and chairman, in a news release. Michael's will complement our existing product offerings and significantly enhance our capabilities in center-of-the-plate categories.

CHEF - 1 year chart

Michael's, founded in 1968, provides specialty cuts of meat and seafood to restaurants, country clubs, hotels and casinos in Ohio, Indiana, Illinois and western Pennsylvania.

The other two acquisitions made since the IPO, brought significant distribution business across the country, but were small in revenue. Provvista, based in Oregon, had annual revenues of about $17 million, when Chefs' announced the deal in November. Praml International in Las Vegas, commanded a sales price of more than $19 million, according to U.S. Securities and Exchange Commission filings from April.

Chefs' Warehouse shares open 13% on first trading day

Based in Ridgefield, CT
Primary Industry: Specialty Foods Distributors
2010 Sales: $330.1 mil
2010 Employees: 543
Proposed Ticker: CHEF
Offering Amount: $100.0 mil
Lead Underwriter: Jefferies & Company, Inc.

The company's stock opened at $17 a share on the Nasdaq, up 13% from its initial public offering price of $15. A total of 8 million shares were sold at the midpoint of its expected $14 to $16 range. It was recently at $16.98, up 13%.

Headquartered in Connecticut, The Chefs' Warehouse distributes a range of specialty food products from truffles to caviar, and claims to be the largest such firm in the New York, Washington D.C., San Francisco and Los Angeles metro markets as measured by net sales.

It carries more than 11,500 items, and supplements the gourmet fare with basics such as cooking oils, milk and flour so that chefs can use the company as a primary food distributor.

The company, which was formed in 1985, has a customer base of more than 7,000 restaurants, country clubs, hotels, culinary schools and specialty food stores. According to its prospectus, chefs often are introduced to the company while attending a top culinary school, such as The Culinary Institute of America and The French Culinary Institute, both of which are customers.

The majority of its sales force, at about 125 workers, has formal culinary training, culinary degrees or prior experience working at a restaurant, a factor the company says helps it connect with its customers.

The Chefs' Warehouse plans to increase sales with existing customers by adding to its product selection, and to add new customers through sales efforts or acquisitions. In June, the company paid $9 million to purchase the inventory and some intangible assets of Harry Wils & Co., a specialty food distributor headquartered in the New York metropolitan area.

Chefs' Warehouse (CHEF) started trading on the NASDAQ on July 28, 2011

Chefs’ Warehouse Holdings, LLC is a distributor of specialty food products in the United States. The Company focuses on serving the specific needs of chefs who own and/or operate independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools and specialty food stores.

Its product portfolio includes over 11,500 stock-keeping units (SKUs) and consists of imported and domestic specialty food products, such as artisan charcuterie, specialty cheeses, oils and vinegars, hormone-free protein, truffles, caviar and chocolate. It has locations in New York City, Washington D.C., San Francisco, Los Angeles, Las Vegas and Miami.

The Company’s customers consist of chefs. It distributes its specialty food products to over 7,000 distinct customer locations primarily located in its six existing markets. On June 18, 2010, it acquired he assets of Monique & Me, Inc., doing business as Culinaire Specialty Foods.