Pocono ProFoods

Client Profile

Pocono Produce Company, Inc., d/b/a Pocono ProFoods (“Pocono ProFoods” or the “Company”) is a broad-line foodservice distributor with customers throughout the Mid-Atlantic and Northeastern United States. Founded in 1940 and headquartered in Stroudsburg, Pennsylvania, Pocono ProFoods distributes over 8,000 products used in food preparation and food service. The Company’s customers include independent fine dining and casual restaurants, country clubs, hotels and resorts, schools and the U.S. Military.

Situation

The Company’s reliable service, quality products, and value-added menu planning services resulted in decades of growth and successful operation. Over the years, the Company became a leading foodservice distributor in its markets and developed a diverse and loyal customer base that led to expansion into several national chain accounts. Starting in March 2020, the wide-ranging effects of COVID-19 began to significantly impact Pocono ProFoods’ core business. Government restrictions and shutdowns of restaurants, schools and hotels led to an immediate and unprecedented decline in customer orders, which had a dramatic impact on operations. Despite implementing cost-cutting measures, the Company experienced revenue and profitability declines, which severely constrained liquidity.

Solution

SSG was retained to explore alternatives to find a strategic partner to strengthen the Company’s capital base and improve liquidity. SSG conducted a comprehensive marketing process to solicit offers from strategic and financial buyers to recapitalize the Company and provide the business with liquidity to support its rebound as pandemic restrictions soften. Leveraging its significant experience in the food and beverage industry, SSG canvassed a wide range of investors and attracted interest from multiple parties. Adding to the complexity of the transaction, Pocono ProFoods had outstanding Paycheck Protection Program loans that were forgivable but needed to be addressed in the context of a potential sale. The sale to Driscoll Foods proved to be the best solution for all stakeholders. SSG’s industry knowledge and experience running complex sale processes in unstable markets enabled a transaction to be consummated on a going-concern basis.