Dallas, TX — Kainos Capital (“Kainos”), a food and consumer-focused private equity firm, today announced the sale of its portfolio company Ferraro Foods to funds managed by Kelso & Company.

Headquartered in Piscataway, NJ, Ferraro Foods is a specialty foodservice distributor delivering quality food and supplies, primarily to the Italian restaurant and pizzeria segment in the Eastern U.S. The Company, which had its first sale in 1975, today sources over 7,000 products from around the world and distributes to over 6,000 end customers. Kainos partnered with Ferraro Foods in May of 2018 after having developed a prior relationship with Ferraro’s owner Michael Giammarino through the team’s network of industry relationships.

Andrew Rosen, Managing Partner of Kainos, said, “Our interest in Ferraro Foods was driven by our thematic-based approach to investing in the food industry and our experience partnering with founder owned businesses. We believed Ferraro Foods could play a unique role as the consolidator in the highly fragmented Italian specialty distribution segment along the eastern seaboard and Michael, with the Ferraro management team that we helped assemble around him, executed brilliantly.” Rosen continued, “We and the team sourced and integrated seven proprietary add-ons of other founder-owned specialty distributors which resulted in exceptional growth during our investment.”

Kevin Elliott, a Partner at Kainos, added, “We built a relationship with Michael Giammarino back in 2016 and were very fortunate to be selected by Michael to be the stewards of this great business that he and his family had built over 25 years. Our familiarity with the specialty distribution space and the Kainos team’s operational prowess assisted Michael and the Ferraro team in executing their growth strategies. Moreover, the Ferraro team demonstrated great operational leadership in driving the core business, even during the challenging pandemic environment, while also successfully integrating the proprietary acquisitions. The net result was performance that surpassed our original plans.”

Michael Giammarino, CEO of Ferraro Foods, continued, “Partnering with Kainos in 2018 was the right choice. The Kainos team helped us grow our footprint, adding four new centers and expanding into key markets including New England and Florida. They supported our team in commercializing the business with better use of systems and data, recruiting and hiring key leaders, and supporting the prospecting and closing of seven acquisitions made in the past two and a half years. Kainos’ ability to work with founder-owners and their appreciation for the importance of culture and heritage during the commercialization of the business allowed us to scale naturally and drive synergies through to strong financial performance. They did everything they said they would do and set us up for continued success.”

Rosen added, “this success could not have been possible without the investments in people and systems that will enable Ferraro to continue its role as a premier specialty Italian distributor on the East Coast.”

Wells Fargo Securities, LLC and Piper Sandler & Co. served as financial advisors to Ferraro Foods. Winston & Strawn LLP served as legal counsel to Ferraro Foods.

Former Chairman and CEO Mike Hagan to Rejoin Board of Directors

Fort Washington, PA  — Nutrisystem, the preeminent direct-to-consumer nutrition and weight management brand, today announced that Stephen Mikulak has been named the company’s new President, effective immediately.

Mr. Mikulak was previously Nutrisystem’s Chief Revenue Officer and has been a leader in the company’s marketing organization since 2014. He is an experienced marketing and digital executive with a track record of business transformation and driving strategic planning, data analytics, attribution, business development, and P&L management across multiple brands and products. Prior to joining Nutrisystem in 2014, Mr. Mikulak held management positions in leading direct-to-consumer companies, including Reader’s Digest Association, AIG and American Express Publishing.

Bob Sperry, a Partner at Kainos Capital, a private equity firm specializing in food and consumer businesses that acquired Nutrisystem in December of last year, said, “We are very excited to promote Steve Mikulak to serve as President of Nutrisystem. During the past several months, we have been consistently impressed by his deep knowledge of the business, drive, and vision for the future. Steve is a natural leader and top performer who we believe is the ideal person to lead Nutrisystem at this important time in its 45-year history. We look forward to continuing to work closely with Steve and the entire Nutrisystem team to pursue a wide range of attractive growth opportunities as we seek to build a leading health and wellness platform.”

Mr. Mikulak said, “I am honored to be appointed Nutrisystem’s new President. Our company has a wonderful legacy of helping millions of consumers manage their health and an exceptional opportunity to build upon that under our new ownership structure. It is particularly gratifying to receive this vote of confidence from our new partners at Kainos Capital who have a strong history of accelerating the development of high-quality companies in the health and wellness space and the consumer sector generally. I’m ready to lead our management team and all of our colleagues toward a promising future for Nutrisystem.”

Nutrisystem also announced today that Mike Hagan, who served as the company’s Chairman and CEO from 2002 to 2008, will rejoin its Board of Directors. With Mr. Hagan at the helm, Nutrisystem grew from approximately $20 million to over $700 million in revenue. Following his time at Nutrisystem, Mr. Hagan served as President of LifeShield, LLC, a Division of DIRECTV, and is currently Co-Founder and Managing Partner of Hawk Capital.

Andrew Rosen, Managing Partner of Kainos Capital, said, “We are thrilled to welcome Mike Hagan back to the Nutrisystem family as a member of our Board. Mike is one of the formative leaders of Nutrisystem, and the Board and management team will benefit greatly from his experience, mentorship and strategic counsel.”

About Nutrisystem
Nutrisystem is a leader in the weight management industry, having helped millions of people lose weight and live healthier, happier and more active lives over the course of more than 45 years. Nutrisystem offers safe, effective and scientifically backed weight loss plans, with distinguished clinical studies and plans that include counseling support and counseling options from trained weight loss coaches, registered dietitians and certified diabetes educators available seven days a week from an award-winning contact center. For more information, visit www.nutrisystem.com.

Company History
Industry veteran Joe Murgolo, an executive at both Polly-O and Friendship Dairies, purchased Cremosa Food Company and New Cremflora Foods in 1995. One year later he was joined by John Albanese, who stepped in as President of both locations. Together, they optimized Cremosa’s product offerings and expanded their line of exclusive brands. Today, their inventory includes a fully supplied stock of over 5,000 items, ranging from fresh, refrigerated and frozen food products to restaurant equipment and supplies. With their large selection of products, they are able to service an array of eateries from pizzeria’s to high-end supermarkets and Italian restaurants. Their fleet of refrigerated and frozen trucks are operated out of Melville, New York and Ocala, Florida.

Exclusive Brands
In order to better cater to the independent pizzeria John and Joe wanted to create an exclusive brand of mozzarella cheese that would be able to stand up against the large name brands. With both of their backgrounds being in dairy, they set out to develop a high end, high quality mozzarella. Wisconsin certified “Master Cheese Makers” developed Finalmente Mozzarella in the milk rich area of Wisconsin cheese country. Finalmente Mozzarella quickly became a favorite among pizza makers for its rich buttery flavor, stretch and mouthfeel.

The Finalmente brand quickly expanded into other premium quality ingredients such as meatballs, grated cheese and flour. Finalmente is not the only quality exclusive brand that Cremosa offers. Asti is the leader in high quality jarred Italian items such as peppers and artichokes. In addition, their longest standing exclusive brand, the Cremosa branded line of products.

Acquisition Outlook
John is excited to join the Ferraro Foods family and is looking forward to working more closely with Michael Giammarino, CEO of Ferraro Foods and Thomas Recine, President & COO of Ferraro Foods. This partnership gives Cremosa Food Company and New Cremflora the opportunity to expand their reach and better support their customers along the East Coast. The acquisition of Cremosa Food Company will help to strengthen and unify legacy family brands on Long Island. Combined with the recent M&A of C&F Foods and LaRosa Food Distributors the completion of this most recent acquisition will join the three strongest pizza distributors on Long Island.

Dallas, TX – Kainos Capital, a private equity firm specializing in acquiring and managing food and consumer businesses, today announced that Alex Stanek has joined the firm as a senior associate of supply chain, further expanding its operations management capabilities.

Andrew Rosen, Managing Partner of Kainos, said: “We are excited to officially welcome Alex to the Kainos team. We have worked with Alex over the past several years as an outside consultant and she has been a great resource in our efforts to drive efficiencies throughout our portfolio company supply chains.  Alex will work directly with Kim Homa, our Director of Supply Chain and long-time member of the Kainos Operations Team. Our Operations Team plays a critical role in Kainos’ investment strategy, and the active management of our portfolio company supply chains not only results in significant profit improvement opportunities but greater reliability, especially in the current pandemic environment.”

Ms. Homa said: “Alex is a trusted partner to management teams and suppliers and will help execute our strategic purchasing initiatives and implementation of supply chain best practices across the portfolio. We look forward to her joining the Kainos Operations Team and believe she will be a great addition to the Kainos culture.”

Ms. Stanek was previously a project manager at USC Consulting Group where she oversaw internal and client project teams’ supply chain and spend management practices with a focus on food and consumer businesses.

Transaction Builds on Firm’s Extensive Experience in Health and Wellness;
Supported by Structured Investment from MSD Partners

Dallas, TX — Kainos Capital, a private equity firm focused exclusively on the food and consumer industry, today announced that it has agreed to acquire Nutrisystem, the preeminent direct-to-consumer nutrition and weight management brand, from Tivity Health (Nasdaq: TVTY) for $575 million.

For over 45 years, Nutrisystem’s clinically proven plans have helped millions of people lose weight safely and effectively. Nutrisystem provides a balanced and clinically proven approach to weight loss with portion-controlled foods specifically designed to meet consumer needs that are conveniently delivered directly to customers’ doors. The Company’s portfolio of entrées, snacks, and shakes is complemented by various live counseling options, including trained weight loss coaches, registered dietitians and certified diabetes educators that are available seven days a week. Nutrisystem also provides a free digital app, NuMi, that helps customers track performance and achieve their goals.

The Kainos team has invested in a number of businesses within the health and wellness space including SlimFast, which it acquired from Unilever in 2014 and sold to Glanbia plc in 2018. During Kainos’ ownership, SlimFast became the fastest-growing brand in the weight management category at retail for three years in a row. The Private Capital Group of MSD Partners, L.P. is partnering with Kainos Capital in this transaction in the form of a preferred and common equity investment.

Andrew Rosen, Managing Partner of Kainos, said, “We are excited to reestablish Nutrisystem as an independent company that is well positioned to help the significant portion of the U.S. population that wants to be healthier, yet struggles with weight management. For the approximately 40% of adults who are considered overweight – and increasingly at risk for a range of serious conditions – Nutrisystem can play an important role in helping improve quality of life. Nutrisystem is a valuable partner to its customers, particularly during the COVID pandemic when it is more challenging for many people to access affordable, healthy meals.”

Bob Sperry, a Partner of Kainos, said, “We look forward to working with the Nutrisystem management team to achieve the full potential of this incredible brand similar to what we accomplished with SlimFast. Nutrisystem offers its customers a complete, cost effective weight loss program that is proven, great tasting, and incredibly convenient, with no initiation or recurring membership fees. Customers don’t need to leave their homes to travel to a weight loss center for scheduled appointments, and they don’t need to weigh their food or count calories. Everything customers need to accomplish and sustain their weight management goals is delivered right to their doors. Nutrisystem provides the most effective and convenient weight loss platform to help customers lead healthier, happier lives.”

John Civantos, Co-Head of the Private Capital Group of MSD Partners, L.P., said, “We have tremendous respect for the franchise Kainos has built in health and wellness brands and are thrilled to be partnering with them in the acquisition of Nutrisystem. This investment is a perfect example of both MSD’s application of deep domain expertise in technology-driven, direct-to-consumer businesses, and our unique ability to construct creative, flexible capital solutions at scale.”

Completion of the transaction is expected in the fourth quarter, subject to customary closing conditions.

Rabobank is providing debt financing for the transaction and is acting as financial advisor to Kainos (through Rabo Securities USA, Inc.). Winston & Strawn is serving as legal counsel to Kainos.

Dallas, TX – Last month, Kainos Capital held its 2020 Kainos Annual Sales and Finance Summits in a virtual meeting format with leaders from the Kainos portfolio companies and members of the Kainos team. Despite the obvious challenges posed by the COVID19 pandemic, the Kainos team remains very active in driving value across the portfolio in partnership with the portfolio company leadership teams. Kainos believes these summits are critical in sharing best practices and further enable us to build strong networks across our portfolio. Moreover, as retailers and distributors navigate these unprecedented times, it is increasingly important for our portfolio companies to understand the concerns and challenges of our partners, which allows for deeper partnerships and stronger execution.

The summits included a combined session led by a panel of merchandising and financial retail leaders from national mass, C-store, grocery and food service corporations, sharing their thoughts on the state of the industry in the pandemic environment and resulting changes in consumer behavior. The Sales leaders focused on critical topics such as digital marketing, sales planning and product analysis best practices, and the Finance leaders dove into functional topics including ESG, cyber-security, and new technical accounting standards, and also shared the results of a Kainos COVID19 preparedness plans to benchmark best practices.

Kevin Elliott, Partner at Kainos Capital, said, “Operational excellence is a critical part of our investment strategy, and we believe these summits are integral to the effectiveness of the Kainos portfolio leadership teams as they navigate through COVID19 and beyond. Our sector has further revealed many pockets of opportunity, even amidst a global pandemic, by leveraging the vast knowledge of our portfolio company leaders and industry relationships.”

Gunnar Olson, CEO of Kainos portfolio company good2grow, said “I have participated in several of these summits with Kainos, and this year was given the opportunity not only to learn from other industry leaders and my peers but also to share knowledge from good2grow’s experience. This connection point with other leaders in our industry certainly makes good2grow better at what we do each day, and during challenging and uncertain times, we appreciate the energy and camaraderie with the broader group.”

Oxnard, CA — Olde Thompson, a California-based provider of private label and branded spices and seasonings, announced today that it has acquired Gel Spice, a family-owned New Jersey-based importer and manufacturer of spices, seasoning, and bakery ingredients to both the retail and foodservice channels. The transaction further establishes Olde Thompson as a leader in the spice category with a differentiated bi-coastal manufacturing footprint, unlocking additional channels and expanding the company’s product offering into pouches, extracts and single serve seasonings for meal kits and other applications.

Olde Thompson is a portfolio company of Kainos Capital, a private equity firm focused exclusively on the food and consumer industry. The Kainos Capital team has invested over $2 billion of equity in 73 investments with a total value over $10 billion. Kainos Capital specializes in investing in family and founder owned businesses where it can be a value-added partner and instill a culture of operational excellence through its sales development, manufacturing, supply chain and administrative expertise.

“Olde Thompson is thrilled to partner with Gel to expand our platform,” says Jeff Shumway, CEO of Olde Thompson. “Through the addition of Gel and the combination of our sales forces, we broaden our reach by adding customers within the retail, foodservice, bakery, industrial and export channels while also increasing our product offerings to include dry mixes, extracts and single serve seasonings for meal kits.  We are now the largest private label focused spice company dedicated to providing complete category solutions.”

David Sugarman, CEO of Gel, who has become Co-CEO of Olde Thompson, shared, “The Engel family, which will continue to be a shareholder, and I are thrilled to be part of Olde Thompson.  The combination will enable us to better serve our customers by leveraging the capabilities at Olde Thompson, including their extensive organic spice portfolio and glass bottling capabilities. With two SQF Level 2 facilities located on each coast, we are now able to provide more efficient distribution and redundant supply to our customers.”

Andrew Rosen, Managing Partner of Kainos Capital, added, “When Kainos acquired Olde Thompson in 2018, we embarked on a strategy to expand the company from a single facility spice business focused on private label to a category leader capable of offering a broader portfolio of product formats to an increasingly global customer base.” Rosen continued, “By adding Gel, Olde Thompson will have not only a bi-coastal operation, but also significantly scaled production and distribution capabilities with material capacity to bring on new business. The transaction also adds a strong sales force, allowing Olde Thompson to serve additional customers in new channels. Kainos will continue to support additional acquisition opportunities to invest behind Olde Thompson’s growth strategy in the future.”

About Olde Thompson
Olde Thompson is a leading manufacturer of private label and branded spices and spice related housewares. The Company provides total spice and seasoning category solutions to Club, Mass, and Grocery retailers across the country. By using stringent food safety practices and a network of trusted sourcing relationships, Olde Thompson ensures its products meet numerous safety and quality standards. Olde Thompson is committed to producing high quality ingredients that are expertly curated to preserve freshness and flavor. Visit www.oldethompson.com for additional information.

Kainos Capital was co-founded by Andrew Rosen in 2012. Since that time, the firm’s primary goal has been to take an operationally oriented and hands-on approach with management teams to drive growth and build companies of strategic value.

Change Capital-based operating strategies are developed with Kainos Capital’s partner companies to increase the sales and profitability and optimize the assets of each company. This active strategy requires intense operational focus and action.

According to founder Andrew Rosen, “… we measure success not so much in the return on capital that we generated, but really in the performance of the portfolio companies the we’ve had the benefit and privilege to be associated with.”

Kainos portfolio companies are supporting the frontline workers who provide 24/7 support and healthcare during the COVID-19 pandemic.

Dallas, TX – In the midst of the COVID-19 crisis, the North Texas Food Bank has flipped its business model to serve the dramatic increase in needs in the North Texas community. The Food Bank has been packing ~60K emergency family meal boxes each week that include 25-27 lbs of shelf stable product and a kitted 15-lb boxes of produce that will provide 21 meals. These boxes are being delivered to NTFB partner agencies across the 13-county service area and are also being distributed at mobile drive-thru distributions. In order to comply with the CDC guidelines, and out of safety for both their volunteers and the community they serve, the NTFB has cancelled all traditional volunteer shifts until further notice. In the meantime, 262 members of the Texas National Guard have been activated to help ensure that hungry North Texans have access to food during these uncertain times. These members come from all over the state and serve in the 56th Brigade. They are on our production floor, warehouse, mobile distributions and helping out at some of the NTFB Partner Agencies.

As corporate sponsor, board member, and partner, Kainos is proud to support the NTFB’s important mission. As traditional volunteer shifts have been curtailed during this time, Kainos will be sponsoring meals for the employees and workers onsite in the coming weeks, and we will continue to support the needs of the NTFB and the community it serves during this critical time.

Dallas, TX – This spring, the ALS Association of Texas held its first local fundraising event of the year, Shoot Out ALS, a sporting clay shooting competition benefiting the ALS Association. The inaugural event raised nearly $50,000. Kainos Capital was a very generous sponsor of the event, and several members of the Kainos team participated in the competition. The ALS Association is the only national non-profit organization completely dedicated to fighting ALS, which is a progressive neuro degenerative disease that affects nerve cells in the brain and spinal cord. Eventually, people with ALS lose the ability to initiate and control muscle movement, which often leads to total paralysis and death within two to five years of diagnosis.