GOLD STAR FOOD SERVICE, INC.

FOR IMMEDIATE RELEASE
April 16, 2014
Contact: Lauren Sinai

Prospect Partners Completes Sale of Gold Star Foods, Inc.

Leading Southwestern School Foodservice Provider Expanded Its Product Offering, Capabilities and Geographic Reach During Prospect Partners' Seven-Year Investment

CHICAGO, Ill.—April 16, 2014: Prospect Partners, LLC, a leading private equity firm investing in lower-middle-market companies, today announced that it has sold its interest in school foodservice distributor Gold Star Foods, Inc. (Gold Star), of Ontario, Calif., to an affiliate of Castle Harlan Partners V and management.

Since its inception in 1978, Gold Star has built a unique niche in the foodservice distribution market through its focus on childhood nutrition. The company serves over 380 school districts — more than 3,500 schools reaching students ages K-12 — in California, Arizona, and Nevada, helping them provide healthy meals through federal and state programs for breakfasts and lunches. Gold Star's extensive product line includes more than 6,000 school-related items, including fresh bread and locally-sourced fresh produce as well as refrigerated, frozen, and dry menu items and essential supplies. Gold Star also is differentiated by its dynamic, state-of-the-art online customer platform, with such features as 24/7 ordering, real-time reports, and automatic inventory integration.

Prospect Partners recapitalized Gold Star in November, 2007, partnering with management to support a growing niche market leader with a superior reputation. "The last seven years have seen a changing regulatory environment, including passage of the Healthy, Hunger-Free Kids Act of 2010, focused on improving childhood nutrition, which always has been Gold Star's core value," said Erik Maurer, a Principal of Prospect Partners. "We were fortunate to work with such an experienced and passionate management team to support substantial growth initiatives, including customizing a new state-of-the-art warehouse facility, developing a sophisticated industry-leading IT platform, expanding the executive team, and acquiring ASR Food Distributors, a strategic add-on that increased Gold Star's customer reach as well as its fresh produce offering. Gold Star significantly extended its leadership position and grew and deepened a host of customer relationships."

Added Dan Madsen, Gold Star's CEO: "Every step of the way, Prospect Partners was a great partner, both professionally and personally. The team gave us ample time, advice, and financial resources in full support of our goal of providing our school customers a complete solution to help them serve healthy, fresh, and great-tasting meals that met their budgets. We are extremely well-positioned for additional growth, and are very excited about Gold Star's future with our new investor-partners."

Gold Star has been recognized by both the United States Department of Agriculture and the American School Food Service Association as one of the nation's outstanding foodservice distributors to school districts.

Piper Jaffray served as exclusive financial advisor to Prospect Partners and Gold Star in the transaction.


About Prospect Partners

Prospect Partners is a leading private equity firm investing in lower-middle-market companies, managing $470 million across three funds. A highly experienced and active investor, Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues typically under $75 million. Since 1998, Prospect Partners has invested opportunistically nationwide in approximately 110 companies in a broad range of niche manufacturing, distribution, and specialty service markets. Based in Chicago, Prospect Partners also has an office in Menlo Park, Calif. 

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