Kronos Foods, Inc.
“By combining our Chicago operations into our new facility, we will improve productivity, increase manufacturing flexibility and create new opportunities to develop innovative products and expand upon the Kronos brand. W. P. Carey is helping us achieve all of these objectives by providing a flexible and timely financing option. We’re confident our new state-of-the-art food processing facility will be key to growing our business.”
Michael Austin, Chief Executive Officer, Kronos
Build-to-Suit Financing
January 2009
Founded in 1975, Kronos is a specialty manufacturer of Mediterranean and Greek food products. Kronos played a large role in introducing the gyro, a blend of lamb and choice beef with Greek spices, to the United States. Today, Kronos is the nation’s leading manufacturer of gyros meat, producing more than 250,000 sandwiches daily. Kronos sells its products through a nationwide network of distributors including Dot Foods, Sysco, and U.S. Foodservice, as well as through large retailers such as Wal-Mart, Sam’s Club, Costco, BJ’s Wholesale Club and Trader Joe’s. Chicago-based private equity firm Prospect Partners, LLC invested in Kronos Foods, Inc. in 2004.
Situation: Kronos was looking to consolidate its Chicago-area operations. After locating a facility oustide Chicago in Glendale Heights, IL, they needed additional capital to renovate the facility into the state-of-the-art food production plant they envisioned.
Financing: The W. P. Carey Group purchased the facility for approximately $15 million and over nine months made an additional $17 million investment to renovate and update the facility.
Outcome: Kronos consolidated their Chicago operations into a state-of-the-art facility as planned with limited cost to them and W. P. Carey gained a strong tenant in a great location.
