Borgman Capital acquires Gilman Cheese Corp.

Milwaukee firm adds first food company to portfolio

Last updated on July 3rd, 2019 at 07:21 pm

Milwaukee-based private investment firm Borgman Capital LLC has acquired Gilman Cheese Corp., a processed cheese manufacturer in northwest Wisconsin.

Gilman Cheese Corp., which is based in the village of Gilman in Taylor County, has become a Borgman portfolio company. The transaction closed on Feb. 28 for an undisclosed price. Sequoya Borgman, founder and managing director of Borgman Capital, said it was the firm’s largest acquisition ever.

The cheese manufacturer was sold by Tom and Char Hand, who have worked at Gilman since 1994, and acquired the company in January 2000. Tom will continue as president of Gilman Cheese, and continues to hold a “material equity stake” in the company. Char will continue as chief financial officer.

“Char and I interviewed many firms,” Tom said. “We were impressed by Borgman’s knowledge and enthusiasm, but what struck us most was their kindness. Immediately after meeting Sequoya and David, we felt they were the type of people we wanted for a partner. Char and I knew they would be good stewards of our company and employees. We feel the future is bright for Gilman Cheese.”

Founded in 1948, Gilman Cheese has more than 120 employees, all of whom are being retained in the transaction, Borgman said. Its shelf-stable processed cheeses are often included in gift baskets, and it also produces natural and processed smoked cheese for the airline and retail industries. Gilman produces more than 1.6 million pounds of processed cheese per month in more than 450 products.

“What we really liked about Gilman was it was an established company in Wisconsin that really had a very nice product,” he said. “It’s a 70-year-old food manufacturer that focuses on premium, organic, all-natural cheeses.”

A few Gilman Cheese Corp. products.

Borgman Capital is a buy and hold investor specializing in acquiring majority interests in established closely held, lower middle market companies valued at or below $50 million. It raises the capital for each transaction individually.

For this transaction, Tecum Capital provided mezzanine debt and equity, Johnson Financial Group provided senior debt, Midwest Growth Partners provided equity, and 85 limited partners contributed equity for the deal. Reinhart Boerner van Deuren provided legal counsel on the transaction.

This is the first food company in Borgman’s portfolio, which also includes: LMI Manufacturing Inc., Lance Industries, Derco Manufacturing, Lift Products, Solutions Dynamics Inc. and AC Precision Inc.

“We like food companies,” Borgman said. “They tend to do well in the downturns. We like the space and there tends to be a lot of them in Wisconsin.”

Borgman said no immediate changes are planned at Gilman Cheese.

“Our focus is buy really nice companies and try to keep the momentum that they already have,” he said.

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Molly Dill
Molly Dill, former BizTimes Milwaukee managing editor.