By Abigail Summerville
NEW YORK, April 25 (Reuters) - The private equity owner of Sauer Brands is exploring a sale of the 137-year-old maker of condiments and spices that could value it at more than $1 billion, including debt, according to people familiar with the matter.
Richmond, Virginia-based Sauer, which was founded in 1887 and is known for its Duke's Mayonnaise brand, is working with investment banks Morgan Stanley and William Blair to gauge interest from potential buyers, the sources said, requesting anonymity as the discussions are confidential.
Charlotte-based private equity firm Falfurrias Capital Partners is expecting to command a valuation for Sauer equivalent to more than 10 times the company's 12-month earnings before interest, taxes, depreciation and amortization (EBITDA) of over $120 million, the sources said.
In 2019, Falfurrias acquired the company - which at the time was known as The C.F. Sauer Company and was owned by the founding family - in a deal that people familiar with the matter said was worth $300 million.
Morgan Stanley declined to comment. Sauer, Falfurrias and William Blair did immediately respond to requests for comment.
Sauer's other popular brands include Southern Sauces, Kernel Season's Popcorn Flavorings, The Spice Hunter, Sauer's and Tasty Shakes. In 2021, it acquired Mateo's Gourmet Salsa.
The food and beverage industry has been a bright spot for dealmaking over the past year. Butterfly Equity is exploring a sale of its avocado-based food products company Chosen Foods, Reuters reported in March. Last year, Campbell Soup CPB.N acquired Sovos Brands, owner of the Rao's pasta sauce brand, for $2.7 billion.
Falfurrias was launched in 2006 by former Bank of America executives Marc Oken and Hugh McColl, and Ed McMahan, who had worked at another investment firm Chicago Growth Partners previously.
Falfurrias focuses on middle-market deals in industries spanning software to manufacturing and has invested in companies including restaurant operator Bojangles, analytics software firm Marquis, and pastry manufacturer Carolina Foods.
(Reporting by Abigail Summerville in New York; Editing by Anirban Sen and Diane Craft)