| March 16
March 16 Rao's Specialty Foods Inc, the tomato
sauce offshoot of famed Rao's Italian restaurant in Harlem, New
York, has hired an investment bank to explore a sale, according
to people familiar with the matter.
The deal will test the appetite of big food companies for
the gourmet tomato sauce that originated in Rao's restaurant, as
the sauce lines battle increased competition from niche, premium
Rao's, which has more than $20 million in 12-month earnings
before interest, taxes, depreciation and amortization, has hired
investment bank Morgan Stanley to lead the sale process,
the people said this week.
The sources requested anonymity because the information is
confidential. Rao's Specialty Foods did not respond to requests
for comment, while Morgan Stanley declined to comment.
Rao's tomato sauce competes with brands both created and
acquired by the largest food companies. Soup company Campbell
Soup Company launched Prego tomato sauce in 1981.
Japan's Mizkan Group, meanwhile, acquired the Ragu and Bertolli
sauce brands in 2014 from Unilever Plc for $2.15
Last year, food and condiment company Kraft Heinz Co
launched a line of premium pasta sauces under the name "Classico
Riserva" with no artificial ingredients or added sugar, in
response to shoppers' increasing shift towards specialty
Rao's Specialty Foods, which was launched by relatives of
the founders of Rao's restaurants, sells oils, dressings and
Rao's New York restaurant opened in 1896. It is frequented
by actors, politicians and singers, including Billy Crystal,
Hillary Clinton and Celine Dion. Rao's has since expanded to Los
Angeles and Las Vegas.
Frank Pellegrino Sr, who founded Rao's Specialty Foods in
1992 and whose New York celebrity as nightly host of Rao's
landed him a role in the HBO show "The Sopranos," died in
January at age 72.
Rao's Specialty made leadership changes in 2016, appointing
as CEO Eric Skae, the founder and former CEO of New Leaf Brands,
Inc iced tea company, and as president Jim Morano, who
previously worked at L'oreal SA cosmetics company.
(Reporting by Lauren Hirsch in New York; Editing by Cynthia