Corridor Capital Eats Sells Indo-European Foods to Global Market Foods, an affiliate of Peak Rock Capital

Los Angeles, CA – Corridor Capital, LLC (“Corridor”) through its affiliated funds Corridor Capital II, L.P., Corridor Capital II Parallel, L.P. (combined “Fund II”) and Fund II affiliate IEF Investment, L.P. has sold Indo-European Foods, Inc. (“IEF”), a value-added distributor and importer of specialty ethnic foods to Global Market Foods LLC, an affiliate of Peak Rock Capital.

In April 2017, Corridor acquired a controlling interest in Indo-European Foods, Inc. and worked closely with recruited CEO Scott Siers. Under Mr. Siers’s leadership and with Corridor’s support, IEF transformed into an institutional value-added distributor and importer of specialty ethnic foods offering third-party, proprietary branded and private label products to over 1,000 independent ethnic grocers predominantly located in the Western U.S. and national chains covering 45 states. Applying its transformational investment methodology, Corridor supported IEF through the COVID-19 pandemic, supply chain disruptions, warehouse relocation, ERP implementation and leadership transitions. Alongside the management team, Corridor focused on building scalable infrastructure to position IEF for sustained success.

“It has been a privilege to work with Scott and the rest of the leadership team to help transform IEF into a leading value-added ethnic food distribution company,” said Corridor Managing Director Iman Navi. “Our purpose as a firm is to collaborate with the leadership of small, business services companies, empowering them to reach their full potential by assisting in the development of scalable and sustainable operational frameworks.”

Corridor CEO Craig Enenstein remarked, “The IEF exit represents the sale of the final controlled Fund II portfolio company. The exit of IEF is not just a testament to the company’s transformation but also a milestone moment for Corridor as we near the end of Fund II. We believe that each investment in this fund has sharpened our underwriting approach, deepened our operational expertise and reinforced our commitment to driving meaningful growth in business services companies in the lower middle market.”

Phase 1 – Infrastructure Implementation

In collaboration with IEF’s management team, Corridor’s initial focus with IEF centered on strengthening human capital, refining processes, modernizing systems and achieving strategic objectives.

Human Capital: Corridor worked with IEF to enhance its leadership structure, recruiting CEO Scott Siers in 2020. Scott brought extensive industry experience, having held leadership roles at Farmer Brothers Company, McLane Company, PepsiCo, Tropicana Products and the Quaker Oats Company. IEF also hired a CFO to focus on processes and systems.

Processes and Systems: Corridor supported management in upgrading IEF’s ERP and warehouse management system to improve inventory management, provide SKU-level data including margins and to enhance the overall go-to-market strategy. With the addition of an institutional level CFO, IEF developed a robust finance function that included budgeting, business intelligence tools, dashboards, reporting and controls. IEF also adopted a traditional board meeting cadence, lender management practices and annual audits. Additionally, Corridor collaborated with leadership to conduct client and product margin analyses, resulting in competitive and strategic pricing strategies.

Operations: IEF achieved progress toward its strategic objectives, including introducing new products and optimizing SKU offerings. IEF enhanced its sales management processes by conducting pilot sales with select national customers and exploring a formal presence in the e-commerce channel. Additionally, IEF upgraded its warehouse operations by relocating to a new facility with a better layout and location, resulting in improved efficiency and cost savings.

Phase 2 – Margin Normalization and Expansion Amid Pandemic Supply Constraints

Stabilization: IEF faced headwinds related to pandemic-related supply-chain challenges, which led to softer-than-expected sales, short-term stock-outs on some of IEF’s items and significant delivery delays caused by port disruptions. These issues also resulted in declines in gross margins driven by increased freight costs, price increases from suppliers and overall food inflation. The Phase 1 initiatives ensured IEF had the processes, systems and talent to adapt to these challenges and enabled a pivot to stabilize inventory levels and product margins.

Additionally, IEF continued to make progress on its strategic and operational objectives including restructuring the sales team to have more effective management, accountability and customer service, implementing new KPIs across the business to track performance, completing a SKU optimization initiative, improving sales management (including new promotional strategies to assist with annual planning and drive incremental volume) and increasing focus on geographical expansion (organically through brokers and internal sales resources).

Corridor believes that implementing its two-phase model assisted in transforming IEF into a mainstream enterprise that was well-positioned for sustainable long-term growth.

Brown Gibbons Lang & Company served as Corridor’s financial advisor and Polsinelli Law Firm provided legal services for the transaction. Kroll supported the process with accounting services. Lockton Companies provided insurance services.