New Water Capital Acquires Klosterman Baking Co.

National customer base of 130-year-old bakery includes convenience stores, other foodservice operators
New Water Capital Partners II Acquires Klosterman Baking Co.
Photograph courtesy of New Water Capital Partners LP II

BOCA RATON, Fla. — New Water Capital Partners II has acquired Cincinnati-based Klosterman Baking Co.

New Water is a Boca Raton, Fla.-based private equity investment firm focused on lower-middle market companies in the consumer products and industrial manufacturing and services sectors.

Founded in 1892 by the Klosterman family, the baking company produces fresh and frozen breads, buns, flatbreads, organic breads, artisan breads, doughnuts and other bakery products serving an extensive national customer base of convenience stores, restaurants and other foodservice operators, grocery retailers and institutional customers. The company operates 17 bakeries and distribution facilities across the eight Midwest states.

The acquisition of Klosterman adds to New Water’s presence in the manufactured-foods sector, which includes frozen foods developer the Perfect Bite Co. and frozen foods manufacturer Pegasus Foods.

“Klosterman’s leading position as a producer and distributor of fresh and frozen bakery items to major grocer, restaurant and institutional customers offers a recession-resistant investment opportunity with excellent long-term growth potential,” said Anuj Singh, New Water principal.

“Over the course of four generations, the Klosterman family has built a remarkable business that has a reputation for putting customers and employees first,” Singh said. “We are grateful to be able to partner with the company to continue building upon that culture and legacy. With the ever-growing demand for consumer convenience, the expansion of the fast-food and quick-serve restaurant sector, and the recent, inflation-driven appetite for home-served meals, Klosterman is well positioned to withstand and benefit from a fluctuating economic and consumer environment.”

Bakery representative Chip Klosterman said, “New Water has a proven record of success in recognizing and building on the strengths of their partner companies to help them reach the next level of growth and success. Their respect for the positive company culture Klosterman has nurtured over the past 130 years made them the preferred partner to take our company into the future.”

Through the acquisition, Klosterman will look to expand the company’s product portfolio and geographic distribution footprint to better serve its growing customer base through a combination of organic and inorganic growth levers, said Nick LaRosa, New Water vice president.

Klosterman President Ross Anderson said New Water’s capital investment and management experience in the food sector will help Klosterman meet existing customer demand and optimize its market position nationally.

“New Water brings leadership and strategic expertise we will be able to utilize to better systemize operations, enhance our distribution channels and position ourselves for further growth,” Anderson said.

New Water Capital’s collaborative transaction and operating model is built to support companies in transition, building on their unique cultures and strengths. New Water previously held fresh foods provider Custom Made Meals (CMM), which it acquired in 2017 and sold in May 2021, after expanding CMM’s U.S. customer base from about 6,000 grocery retail locations to more than 15,000 retailer locations nationwide.

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