KeHE to Acquire West Coast Distributor

Acquisition of DPI Specialty Foods will allow expansion of fresh food portfolio, customer base

5/25/2023

Once the acquisition is complete, the complementary strengths of the two entities will provide a robust nationwide fresh offering and an expanded customer portfolio.

KeHE Distributors LLC, one of the largest pure-play grocery and natural distributors in the nation, has entered into an agreement to acquire DPI Specialty Foods, a specialty food distributor with key geographic locations across the western United States, from food- and beverage-focused private-equity firm Arbor Investments, which has offices in Chicago and New York.

With the help of its more than 6,800 employee-owners, KeHE distributes fresh, natural and organic, and specialty products to more than 30,000 natural food stores, chain and independent grocery stores, e-commerce retailers, and other specialty product retailers throughout North America. According to KeHE, once the acquisition of DPI is complete, the complementary strengths of the two organizations will provide a robust nationwide fresh offering and an expanded customer portfolio.

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“KeHE is dedicated to being a source for good, and this expansion provides an opportunity to deliver enhanced experiences for customers, suppliers and ultimately, consumers,” said Deb Conklin, president and CEO of Naperville, Ill.-based KeHE. “This year we’re celebrating seven decades of serving and feeding America, and this acquisition continues to position KeHE as the preferred supply chain partner in North America.”

According to KeHE, the transaction advances its partner success and growth objectives through two primary strategic initiatives:

Enhanced capabilities in the fresh market. KeHE’s fresh food portfolio will grow, which will allow retailers to respond more quickly to customer demand.

A broadened, complementary customer base. Backed by powerful data-driven insights, business intelligence tools, and additional warehouse space to help drive scalable growth, KeHE will add more than 1,000 DPI customers across all channels, delivering products in a one-truck solution. KeHE’s and DPI’s knowledgeable experts will continue to offer high-touch support to all customers.

“Both DPI and KeHE have built impressive networks, deep industry and category expertise, and value-added services over decades of operation,” said Russ Blake, CEO of Ontario, Calif.-based DPI. “Combining our complementary strategies allows us to further capitalize on those strengths to offer superior value for the U.S. food industry.”

The transaction is subject to customary closing conditions and government regulatory approvals. KeHE and DPI will continue to operate independently until the transaction is closed.

BMO Capital Markets Corp. served as exclusive financial advisor to KeHE.