The Wise Exit

Cashing Out Mergers & Acquisitions (M&A) Podcast | E27 | Selling Garden Fresh Salsa to Campbell's Soup, and Trying To Buy It Back

00:00:01:14 - 00:00:31:09
John Latella
One of the most iconic brands in Detroit in the last 20 years. Right. And the things that it allowed us to do in the community and the involvement in the community, charitable things and just in the food space and the goodwill on all the different things, it's soul crushing when you see those kind of things. And it's not because the big guys care individually as people, but when you get so big, you can't do some of those things anymore, right?

00:00:32:08 - 00:01:03:14
Todd Sullivan
Welcome to the Cashing Out podcast, where our fellow founders share real stories and offer honest advice around selling their companies to some of the top acquirers in the world. My name is Todd Sullivan, CEO of Exit Wise, where we help business owners create the exits they deserve. Today, my guest is a good friend, John Litella, who is a former owner and CEO of the family owned iconic food brand Garden Fresh, which John and his partners sold to the Campbell Soup Company in 2015 for $231 million.

00:01:04:02 - 00:01:34:06
Todd Sullivan
John and I talk about how he acquired other companies to grow his business to more than $100 million and sales. We touch on what factors his company used to pick their ideal acquirer. And finally, we discuss what drove John and some new partners to try to buy the business back just a few years later. Today, John is an active angel investor and founder of Legacy Fantasy Sports, a fantasy sports platform that allows users to insert their favorite professional players from the past into live pro sports events.

00:01:34:19 - 00:01:38:14
Todd Sullivan
We've got a lot to cover, so I hope you enjoyed my conversation with John Litella.

00:01:43:02 - 00:02:09:20
Todd Sullivan
John, thank you so much for being here today. Like we've known each other for a couple of years and I was excited to get you on. I think your story with Garden Fresh is so interesting. Based on where you came from, joining your dad and a partner CEO, the company, it growing it into an iconic Michigan brand, selling the business, trying to buy it back like there's so many great stories here.

00:02:10:05 - 00:02:29:16
Todd Sullivan
And I feel like maybe you felt like you were learning along the way. But there's so many things I think we can share with our fellow founders as it relates to building a business and selling. I know what you have is, is gold for everyone. And the last thing I would say is, is Mark Cuban actually had this timeslot, but when this is the only time that you could fit in, I just bumped him immediately.

00:02:29:16 - 00:02:31:01
Todd Sullivan
So I thank you for being here.

00:02:31:04 - 00:02:37:11
John Latella
And thanks. You know, I'm just I'm a few billion short of Mark Cuban, so, you know, that's your basket. I can.

00:02:37:11 - 00:02:39:03
Todd Sullivan
You're a basketball guy, right? Like.

00:02:40:03 - 00:02:48:00
John Latella
Yeah, yeah, I actually was two, so I haven't had my chance to buy a team, but I think. I think I could take Cuban, though I'll be honest.

00:02:49:05 - 00:03:09:05
Todd Sullivan
Hopefully Mark finds in his heart to forgive me for all these times. I say that, but I will again, thanks. Thanks for doing this. I think a great place to start, right, is where you started in your career. You earned Tani and then you just jump two feet into entrepreneurship. So can you take us back to that time?

00:03:10:14 - 00:03:43:04
John Latella
Yeah. So, you know, as you said, I'm an attorney by trade advice, actually was practicing law really didn't have any desire or necessarily foresight to see that I would end up in food manufacturing and or in business kind of honing my skills with that. And at the same time, you know, my family, my my father was lucky enough to partner with a couple by the name of Jack Internet here and then to a certain degree and Jack, wouldn't, you know, God rest his soul, if you were still around, he wouldn't be upset with me saying this.

00:03:43:04 - 00:04:08:07
John Latella
But kind of running a failed little restaurant at the time and happened to come across and become friends with my dad through a consulting arrangement and kind of took off from there. He he had a great product in the salsa that he was making in the back room of his restaurant. And you combine that with my dad's business acumen and it kind of kind of took off.

00:04:08:11 - 00:04:16:14
Todd Sullivan
Yeah, he was a great guy. Like, I didn't know him personally, but I heard him speak and everybody spoke so highly of him, how personable he was. So yeah, great to mention him.

00:04:17:00 - 00:04:22:04
John Latella
From a standpoint of being a great culinary genius. He was even a better person. You're right.

00:04:22:22 - 00:04:36:21
Todd Sullivan
So, okay, so you you're brought into the business by those two getting together and say, Hey, we can do some start something interesting, but they need someone to kind of run the ship, right? So you go in as CEO to start and actually you were counsel lead counsel at first.

00:04:37:22 - 00:04:57:12
John Latella
Yeah. So the business actually started I was actually in my last year of law school and I started the business. So I in terms of being involved with it, I was there from day one. I did I did what you would call probably our, you know, our our first simple contracts, all of our trademarks, kind of intellectual property type stuff to start.

00:04:58:01 - 00:05:31:05
John Latella
And then really, again, you know, the reason I came in, my dad actually became ill and then he and Jack approached me about coming in. Jack and I had five kids that worked in the business. I had an older brother and a younger sister. So the whole purpose of me coming in kind of with being that, you know, generation, you know, 20 years younger than what they were, was to make sure that we still had, you know, somebody with my skill set, I guess so to speak, being able to come in and kind of learn and take over for them.

00:05:31:06 - 00:05:46:21
Todd Sullivan
All right. Well, you grow the business substantial. Lee. Right. Over 100 million bucks. And I know Pepsi was kind of knocking on the door for a while, but what was the decision? One of the things that is happening to say, hey, maybe we should think about, you know, an exit.

00:05:47:21 - 00:06:09:10
John Latella
You know, So we had been approached, man, I want to say, and I'll name them all. Actually we were approached probably a good six or seven times over the course of maybe five years going back to probably 2007. Pepsi made a run on us twice. T. Marzetti’s, which most people probably know of that, you know, if you're in the dip space and whatnot, you've seen their dressings and stuff.

00:06:10:04 - 00:06:37:17
John Latella
Nestlé, which was called, you know, which is Osem Israel was another company. Calavo, which is known for their guacamole and avocados. And really at that time, if you recall, you’re going back to this time, this is kind of when food manufacturer ring in. Pretty much everything was moving towards a fresher, you know, getting preservatives out of products. So there was that what I would call that fresh revolution.

00:06:38:11 - 00:06:59:23
John Latella
And we were kind of at the forefront of that. Right? We created we didn't create salsa, but we created this essentially this niche, which was all natural, fresh salsa in the deli, not with no preservatives, with a pretty good shelf life on it. Right. So we weren't we weren't being you know, we weren't being sold in, you know, the aisles of the grocery store.

00:07:00:00 - 00:07:12:12
John Latella
You know, it was a cooked product sitting on a shelf in a jar. We're in, you know, the 16 ounce plastic containers being merchandised in the delis, which had never been done before or even before.

00:07:12:12 - 00:07:20:13
Todd Sullivan
Okay. So, John, those were all the potential acquirers knocking on the door. Right. So you had a lot of attention over a few years.

00:07:21:05 - 00:07:38:12
John Latella
Yeah. Good, good. Four or five years, multiple, multiple suitors, multiple different valuations. You know, obviously over the course, three, four or five years, multiple change, you know, markets, market, you know, sentiment changed. So a lot of different things changed.

00:07:38:18 - 00:07:46:01
Todd Sullivan
And did you have any representation when to field those offers or were you you're the attorney you're like, I'll take this call.

00:07:46:17 - 00:08:08:00
John Latella
So shockingly enough, the greatest attorneys do not represent themselves, let's put it that way. As you've probably heard a lot of people say that. So we literally even went up to the point when we did end up selling the Campbells. We did not use a broker. We in that could actually go to a probably I'm sure you might have another question here at some point in time, but that's probably in hindsight too.

00:08:08:00 - 00:08:44:19
John Latella
One of the things we learned by not having a broker benefited us, and obviously we were able to save a significant portion of the sale price, whatever that 3 to 5% might have been. There. Yeah, but in the same token, I feel like we probably might have left a little bit on the table to ultimately buy. We never put it out for a bid or an auction process either, so we didn't necessarily get the benefit of maybe having two or three companies, you know, bid against each other to know if we were getting their total ceiling or the top price that maybe we could have gotten for the business, But got it.

00:08:45:05 - 00:08:55:08
Todd Sullivan
All right. So something happens that the Campbell Soup Company steps up, Right? And is it is it the number? Is it the timing? Like what what makes you decide this?

00:08:55:08 - 00:09:13:17
John Latella
So I think it was a little bit of everything at that point in time. So this is 2015. You know, obviously a lot had gone on in those years past. We had, you know, a couple different we had hummus, now we had dips, We had bought a tortilla chip company as well. So we had a pretty broadly been I think ultimately what it was was a cultural fit.

00:09:14:18 - 00:09:35:06
John Latella
And at that time Campbell's had gone out and was purchasing some several smaller companies to kind of put into what they called Campbell's Fresh. Yeah. So it was actually in shockingly enough, it was another Michigan company, Bolthouse Farms, which was actually started in Michigan years ago. But they're now out in Bakersfield, California.

00:09:35:16 - 00:09:36:00
Todd Sullivan
Mm hmm.

00:09:36:04 - 00:10:01:14
John Latella
Bolthouse was the company that so Campbell's had bought them. It was actually Bolthouse that we started talking to at the time, which the president and I believe of the fresh division was Jeff Dunn and Dave Zilko, one of my partners had formed a relationship with him and literally from the moment they came in, they were more entrepreneurial, I think, because we weren't necessarily dealing with the Campbell people yet.

00:10:02:13 - 00:10:37:17
John Latella
So they really understood it. You know, it was a vetting process. We got to know them. We you know, several times out of Bakersfield, several times them coming in. And I think just the connection that we had with the team that they had put together on their end and then finding somebody that we thought for us that was probably, you know, and again, I'll just say, you know, it was maybe 50% price in 50% the way, you know, they were going to treat and keep our team together.

00:10:38:03 - 00:10:57:12
John Latella
You know, we had 450, 500 team members that it was just as important to us to make sure the business was staying in Michigan. That it was staying in Ferndale, that they were going to continue with the same pay and the same benefits and doing all the same things that we had done for years, essentially for what was our family.

00:10:57:12 - 00:11:00:07
John Latella
And I think that was probably the biggest component of it.

00:11:01:15 - 00:11:17:10
Todd Sullivan
Yeah, I can I can understand it, right? If they're creating another division and it's smaller companies and it can maybe feels like all this will keep it's kind of family business roots, right? And the way you guys treated people to keep that going, that could make some sense. But I think, you know, I kind of jumped the gun.

00:11:17:10 - 00:11:35:00
Todd Sullivan
What I thought was interesting is, you know, you've got the you're at the helm and yet now you've bought two companies kind of diversify the product line. Can you maybe take me into what that was like, deciding to buy companies? And then how do you go out, find them, negotiate and get those deals done?

00:11:35:04 - 00:12:01:15
John Latella
Sure. And you know, the interesting thing with those, you know, in a lot of respects, it was very similar to what happened with us with Campbell's right. You know, the first company we obviously started as a salsa company, which was, you know, we were doing very well at it, but we knew and buyers here's the nice thing about what we were doing and knowing that we had something good going for us was when we didn't necessarily have to cold call anymore.

00:12:01:15 - 00:12:18:14
John Latella
Right? It's when the buyer, you know, that the buyers from Myer are going into Kroger, right. To see what Kroger has on their shelves. And it got to a point where we had the buyers from different stores and different companies coming north as opposed to us cold calling and saying, Hey, are you are you interested in our salsa?

00:12:19:17 - 00:12:46:02
John Latella
We started getting those calls. And then one of the things too, that it allowed us to be as successful as we were and to grow, that was they started looking for different things. Hey, what other product line offerings do you guys have? Yeah, that's when we started thinking. And you know, Jack, my partner, was obviously a self-taught culinary genius, and I'll call him and he started looking and going, Well, you know, we can add these things, so let's look and what can we add?

00:12:46:02 - 00:13:07:12
John Latella
So non preservative based hummus line. So we went out and we found that and again, it just happened to be local. Shockingly enough, we ended up buying Basha hummus, which was out of it. Made in Inkster, Michigan. Mm hmm. Again, another perfect fit for us in terms of what they were doing. Their product. That was the number one selling hummus brand in the Midwest.

00:13:07:12 - 00:13:29:17
John Latella
So it fit perfectly within, you know, with what we were doing. Yeah. So we brought that on in. Pierre Chammas, who was the owner and creator of Basha Hummus, became a perfect fit to fit within. And again, it was a cultural thing, right? Yeah. Yeah. So he himself, as well as his his team members and employees, fit perfectly within what we had established at Garden Fresh.

00:13:30:07 - 00:14:01:06
John Latella
And then it became the same thing when we were looking to we needed now we had our hummus, we had our salsa, and we needed a conduit to deliver both of those things. So we had previously had been co manufacture during our tortilla chips. We were using Haciendo, which was out of Detroit, and we started searching and we happened to find just happened to find in Grand Rapids there was a tortilla chip company called El Matador that again, it fit perfectly well.

00:14:01:12 - 00:14:19:10
John Latella
What we were looking to do was a great family run business. Yeah, great team members. Culturally, it fit. The only thing is a little bit different there. And the little Navarro family who we bought that business from, they were ready to take a step back. And this was their swansong, right? They were ready to get out of the business.

00:14:19:10 - 00:14:45:13
John Latella
They did have a couple of daughters, but they they weren't interested in sticking, staying on or being part of the new entity. But again, it was another all natural. They it fit perfectly within what we were trying to do. They didn't make their tortilla chips from flour. They actually stone ground the corn and made the masa. So it was a process and it was a homemade product.

00:14:45:13 - 00:15:11:00
John Latella
No preservatives again, that fit perfectly within the brand that we were trying to sell. So we bought El Matador as well. That was 2010 ish. And then dips. We didn't buy another company when we were making our dips. We had just developed some of our own recipes and some of our things along the line with that. The key component here across up until the point we even sold was culture, right?

00:15:11:16 - 00:15:35:02
Todd Sullivan
What I love to hear is that your customers are saying, We're so happy with this product. They're asking you to innovate on your product line, right from white label to what else can we take from you? Right? And so that stimulates let's go out and diversify the product line. And the reason it really works is that you're finding both mission, right?

00:15:35:02 - 00:16:03:12
Todd Sullivan
How these companies are founded. De Process is family oriented, treating employees really well. And then culture when you come together right to these companies mix and you and Pierre are really good friends today, right? Like you clearly got it right. So now you know let's fast forward to the exit to the Campbell Soup Company. It appears, right, that you're going to have that fit because they've kind of raised the flag of like, we're going to buy smaller companies under this fresh brand.

00:16:04:09 - 00:16:16:19
Todd Sullivan
But, you know, take me through that, right? You sell it, there's a purchase price that you're really happy with. You think culture is going to fit what happened in that transaction that we might be able to learn from that you think might be unique?

00:16:16:21 - 00:16:38:15
John Latella
You know, at the end of the day, you know, you nailed it, right? They checked off the first box culture, second bar, kind of hand in hand. They're right. We got the price that we thought was fair. We were looking for, regardless of how we got to that price, it was a strategic buyer. It wasn't somebody. It was somebody that was looking to add and keep our brand what it was.

00:16:38:15 - 00:17:02:16
John Latella
Right? Right. And, you know, at the end of the day, though, I think Campbell's is always going to Campbell's a Fortune 500 company, been around for 100 years. The Dorrance family. You know, actually the shocking thing with that is and I learned this through the process, the Dorrans family actually still own the majority of Campbell's stock, which goes all the way back to the beginning of Campbell's, the advent of Campbell's.

00:17:02:16 - 00:17:24:21
John Latella
And I just think that it really wasn't right on the wall at the beginning. But, you know, Jack and I both I believe our other partner, Dave Zilko, we all had one year non-compete. I think for me it was within those first few months when the phone wasn't necessarily ringing a lot, that it kind of piqued my interest.

00:17:25:00 - 00:17:47:11
John Latella
You know, me personally, I'm thinking, you know, the one of the things that made us successful is that culture in the community feel and the things, the level of customer service and the things that we were able to accomplish based on us. And I think when we had buyers and we had store managers and whoever it may have may have been, they knew that they could get Jack on the phone or they would have me on the phone.

00:17:48:09 - 00:18:12:05
John Latella
And I think that level and when you have these bigger companies buying these family run culture driven companies, that that dissipates. And it's it's not bad. I don't think they do it on purpose. I just think it's the nature of the beast where I had one person handling customer service and taking calls and people knew that they could count on Carol Lowery.

00:18:13:03 - 00:18:35:03
John Latella
Campbell's has 100 people in there, right? So you're never even going to get the same person over and over again. And it just started to dissipate. And, you know, then you start hearing after the fact that, you know, the relationship with Wal-Mart is strained. And all these things that we were is great as a product. We had we also had great relationships as well.

00:18:35:03 - 00:18:51:05
John Latella
And I think those two things go hand in hand. I think you can have great relationships in a crappy product or a great product in crappy relationships. We had both those things, and I think that that was very key to us and that just started to dissipate.

00:18:52:08 - 00:19:10:20
Todd Sullivan
Yeah, I remember, you know, you talked about this and you you have a great story with Pepsi coming in and and you guys not only have the relationships, but you're willing to do what a customer asks, Hey, can you do this for us? Yeah, we're going to get that done. Where a bigger company is like, how are you possibly going to do that?

00:19:11:03 - 00:19:16:06
Todd Sullivan
Right? So let's hear the kind of the Pepsi story of your flexibility.

00:19:16:06 - 00:19:34:23
John Latella
Yeah, that's actually one of my favorite stories of all time. We were sitting and I remember the first time Pepsi had come in, we were sitting at our accountant's office and we were all sitting around the table. And I remember we got into a discussion regarding R&D and how long does it take for you guys to create a new flavor profile, let's say salsa or a dip or whatever it is?

00:19:34:23 - 00:19:54:00
John Latella
And I and they asked us, they said, So where's your R&D department? And I remember Jack was sitting right next to me. I pointed to him and they started like they started chuckling. They thought I was kidding. And I said, Yeah, this is here's here's our R&D. He's sitting right here next to me, you know, here, ask them whatever you want.

00:19:54:00 - 00:20:18:22
John Latella
So they they literally were laughing. But it was one of the things that made us so successful as as you said, Tod, is we were so nimble and able to get product to market. My response back to them was, I can have something in the market by next week as long as I have the packaging in-house, you know, as long as it's not a new pack size or something that we're going to have to go out and, you know, retool something or do something.

00:20:19:10 - 00:20:40:04
John Latella
You know, I can have that sitting on your shelves in 1 to 2 weeks. And it was funny because, you know, with them you're talking six months to a year and the different focus groups that they got to talk to and all the different, you know, make make sure again, it's that bureaucratic checklist, right. That they have to go through that we didn't have to.

00:20:40:04 - 00:20:48:21
John Latella
And another one of those things, though, that at least what I would say, you know, kind of dissipated after after the sale.

00:20:49:09 - 00:21:09:00
Todd Sullivan
Yeah. Can we talk a little bit about like part of the decision to sell? Right. Is your dad and Jack are a different generation, Right? So they've got kind of different expectations than you. Was it pretty easy to get on board when you saw, hey, this is the right fit, this is the right price and it's the right thing to do for the other owners?

00:21:09:07 - 00:21:41:10
John Latella
Yeah. I mean, yes. And again, going back, they you know, they're significant. They're they're obviously you mentioned my dad. You know, my parents age that are good, 25, 30 years older than I am. So they're at a different point in their career that I am in, you know, when you're talking the type of multiples and dollars that that we were talking about, there comes a point in time where you look at it and you say, How much more can we do in this business and what do we want to do in hindsight?

00:21:41:10 - 00:22:05:06
John Latella
Now, when we sold I was I was 42 years old personally know I would have preferred to not not that I not that I take anything for granted, believe me, because we did very well. But, you know, I would have liked to have seen another ten years, maybe 15 years. And it because it was fun. But I also get I also get the point that, you know, this was Jack's jacket and that's baby.

00:22:05:06 - 00:22:25:01
John Latella
Unfortunately, my dad had passed a couple of years prior to a sale, our last sale. So he didn't even get to see the fruits of his labor. And you know what? He had created. But, you know, you're not going to bite off your nose to spite your face. Right. In terms of when you've got a willing and able more than willing and able buyer that's sitting there right in front of you.

00:22:25:01 - 00:22:30:05
John Latella
And you never know what the market's going to hold. So from that standpoint, prior to.

00:22:30:20 - 00:22:31:03
Todd Sullivan
Yeah.

00:22:31:13 - 00:22:39:16
John Latella
It was a great decision. In hindsight, you know, obviously I like I said, I wish I would have got another ten, 15 years out of it maybe.

00:22:40:05 - 00:22:47:22
Todd Sullivan
Yeah. All right. So Cambell Soup Company buys it, 231 million And and and you're doing this one year now?

00:22:48:03 - 00:22:51:23
John Latella
Yeah. No, no, no, no. Earnout. Just a one year non-compete for us.

00:22:52:07 - 00:23:02:09
Todd Sullivan
A one year non-compete. So you weren't even working there, like, okay, so what? What happens because you get the opportunity to potentially buy this back and I really want to hear about that.

00:23:02:12 - 00:23:22:06
John Latella
So. So obviously, Campbell's buys it, they come in, they're running it. A lot of the lot of the same management team that we had in place was still there within a year, year and a half after that. And then slowly you start hearing of different people are starting to slowly exit the business, whether or not it was from them, just not feeling that it was a good fit anymore for them.

00:23:22:15 - 00:23:42:10
John Latella
And in some instances it was Campbell's, you know, moving some of those people, the key people that we had out. So, you know, you hear through the grapevine, I'm like I said before, you know, Wal-Mart, you know, the Wal Mart business might be in jeopardy. All these different things might be in jeopardy. And we get word that I get a call from a couple local.

00:23:42:12 - 00:24:04:04
John Latella
You know, guys that source deals for a couple of the bigger players in town that the business is potentially for sale. And so we start vetting that and I'm vetting that out. And lo and behold, the business was was Campbell's was looking to sell it And you're talking this was just two years, maybe not even two years after they had bought it from us.

00:24:04:19 - 00:24:07:11
John Latella
And I was 100% in trying to buy it back.

00:24:08:12 - 00:24:09:20
Todd Sullivan
Yeah. You and Pierre, right?

00:24:09:21 - 00:24:34:00
John Latella
Yeah. So but I partnered with Pierre, who we had bought Basha Hummus from. We were being sponsored by, by somebody in the private equity world that was interested in getting into this game because he knew of the companies and Michigan guy himself. Yeah. And we, we made a run on it. And shockingly enough, it sold for significantly, significantly, significantly less than what we had sold for.

00:24:34:00 - 00:24:34:12
John Latella
So.

00:24:35:00 - 00:25:12:00
Todd Sullivan
Yeah, it's really it's really incredible when some of these kind of bigger entities, public companies, they have a mission to say, hey, we've got to strengthen the balance sheet. We got to kind of reorganize financially. What are the things that we can divest? Maximizing purchase price doesn't tend to be it, right? So if you're standing there and you've got the capital behind you and you can make like a legitimate bid, you have a chance to really pick up an undervalued asset, particularly when you've got the really experienced management team like the two guys that ran the two biggest components of this thing coming together, that would have been really, really nice to see.

00:25:12:05 - 00:25:22:21
Todd Sullivan
So all right, so you get the opportunity to do it right. You got kind of the money guys surrounding you and what happens, right? This is like a black box for a lot of us. Yeah.

00:25:22:21 - 00:25:38:20
John Latella
So, you know, this this is world warning, the learning experiences for me, right? Because I wasn't the big and again, we didn't technically know what the purchase price at that point was going to be going back into it to buy it. But, you know, I was obviously going to have to come out of pocket myself for whatever portion of it they want.

00:25:38:20 - 00:25:53:17
John Latella
It wasn't going to be any for anything astronomical, but obviously they wanted to know that I had Pierre and I were going to have some skin in the game as well. I would say the learning experience for me was me. You know, there was a team that they had put together, right? They they had a team behind them.

00:25:53:18 - 00:26:25:01
John Latella
I was Pierre and then were part of part of this team, but we weren't part of the team where we were allowed, so to speak, in the room when there were some of these other negotiations going on. And I would say that was probably the biggest learning experience for me is not demand being, especially because I was going to be the CEO of this newly formed entity if we were the purchasing, if we ended up winning the bid to get it, to make sure that I was part of that, you know, I was led to believe that we had exclusivity in terms of the negotiations that were going on.

00:26:25:17 - 00:26:46:02
John Latella
And then, you know, at the last minute and honest to God, this was totally at the last minute, I thought we were actually getting I was actually getting a call that we had won the bid. But the call was actually that at the end for another company had come in out of Canada and offered to pay cash, which we were going to pay cash as well, but no due diligence.

00:26:47:03 - 00:27:00:03
John Latella
And quite frankly, you know, that same type of deal for me crap, I would have said no due diligence. It was my business for right for 20 years. So how much diligence, what I needed to do, you know.

00:27:00:20 - 00:27:04:00
Todd Sullivan
And you knew you knew it was already it was doing 100 million of revenue.

00:27:04:13 - 00:27:21:07
John Latella
And it was still I think revenue had only dropped about 10 million. So from what I understood at that point in time, it was it was about 95 million in revenue. Still, it was still beyond viable. The brand itself was was still unbelievably strong. It still is to this day. I mean, you still go to the store now.

00:27:21:07 - 00:27:52:19
John Latella
It's still there. So just, you know, just I wish I would have would have put myself more into being more of a vocal, I guess, component in trying to really get that done. But even to have the opportunity was, I'll be honest with you, was actually shocking to me that it was that soon after. Yeah. What we had, you know, in Campbell's, I think ultimately realized, listen, let's do what we do well, which is soup in because if you've you know, if you've noticed, you don't really see any more of the Campbell Fresh.

00:27:53:09 - 00:28:00:13
John Latella
They've actually sold Bolthouse since the a few of the companies that they bought around the same time we did that they've divested themselves off.

00:28:00:13 - 00:28:24:21
Todd Sullivan
So yeah I think you know what's interesting is is picking the right buyer It seemed like you had everything in order, right, that this was the perfect home. And it's not like it's something to take lightly because this is something that your family created, your closest family friends create. And so there's a lot of legacy around this. I know this brand, you know, here in Michigan and throughout the Midwest.

00:28:24:21 - 00:28:42:15
Todd Sullivan
Right. People saw it in a different way than you see, you know, your typical brand like a Campbell's Soup on on the shelf. So I'm glad that it still exists and it still lives. Right. But that's got to be hard to see that the next person kind of messes up or messes with the legacy.

00:28:43:01 - 00:29:02:17
John Latella
Well, 100%. I mean, if there's anything that's more soul crushing than anything it is the fact we were we had built something that, like I said, we had 450, what I would call almost family members. Right. It was you know, these people were reliant on us just like we're reliant on them. I mean, it was it was a it was mutual.

00:29:03:05 - 00:29:26:04
John Latella
They worked hard for us to create what has become or what I thought was one of the most iconic brands in Detroit in the last 20 years. Right. And the things that it allowed us to do in the community and the involvement in the community, charitable things and just just in in the food space and the goodwill on all the different things.

00:29:26:04 - 00:29:49:15
John Latella
It's soul crushing. And when you see those kind of things and it's not because the big guys, you know, no, I don't want to say that they don't care individually as people, but they get when you get so big, you can't do some of those things anymore. Right. And I think that that's that's the thing that that's really hurt more so than anything.

00:29:49:15 - 00:30:11:23
John Latella
Right. That when you see those things because you're right heart and soul. You know I did I cleaned bathrooms. I said I'm a light and made product. You know, I did every single thing possible at that company over the course of, you know, 15 years, whatever that, you know, becomes hardy 100%. It becomes part of your identity.

00:30:12:16 - 00:30:29:00
Todd Sullivan
Yeah. It's incredible journey. All right, So maybe we can kind of enter our kind of overtime questions here. So when when you did sell the first time, was there somebody that you call? I mean, you're obviously doing this with Jack, but who's your first call after?

00:30:29:04 - 00:30:51:16
John Latella
Oh, God, it was 100% my wife, because she had to endure. She had to endure. We started I remember we started the so we sold and we closed in June of 2015. So we coming into the Christmas prior to we had just started talking, talking to them. So we were waiting to see if the if their initial numbers were going to be in the ballpark of what we were looking at.

00:30:52:04 - 00:31:12:05
John Latella
And they were. And I remember sitting and, you know, I can't tell you how many conference calls and meetings while on spring breaks and whatnot. So my and my wife number was the the number one call for, you know, everything she had to endure with with me to let her know that this is definitely going to be happening.

00:31:12:05 - 00:31:30:07
Todd Sullivan
So that's awesome. That's awesome. I mean, we hear it time and time again and you can't say it enough that going through an M&A process is like having a second job. You're giving up nights, you're giving a weekend's vacations because you got to keep growing a business, right? And typically you don't have like lots of layers of management.

00:31:30:07 - 00:31:48:18
Todd Sullivan
You got to you're pulling your weight every day. And then on top of it, right, you're trying to prove to somebody everything that you've shown them through a due diligence period is true. And answering every possible question, that's really, really tough. So, yeah, great, Great to hear the wife is the first call. How did you celebrate with team or family?

00:31:48:18 - 00:31:49:10
Todd Sullivan
Anything Big.

00:31:49:17 - 00:32:15:12
John Latella
Couple. I give you a couple different answers for that. So team was actually pretty exciting because we had prior to we had had a minority partner that we had bought out a couple of years prior to. So we had some equity that was sitting there. So we actually bonus that a ton of employees pretty significant bonuses and we based it on longevity or how long they had been there, which was kind of cool, was very exciting to be able to do that.

00:32:16:01 - 00:32:39:10
John Latella
And then, you know, nothing right off the bat. It was it was more so, you know, I'm sure in there was some good dinners. I did buy I did buy about a couple bottles of Pappy Van Winkle after the fact. But our big thing was we took a month long trip to the summer after we went to Italy for a month, which was fun.

00:32:39:14 - 00:32:53:02
Todd Sullivan
That's great. That's great. So maybe I'll just ask a couple final questions. And one is kind of overarching. If you have any advice for fellow founders who may be in this position today.

00:32:53:06 - 00:33:15:17
John Latella
Sure. I mean, first and foremost, I'd say enjoy the ride, right? You never know where it's going to take you. But I would say the journey is just as important as anything else. Right. Make sure. And I think our story is kind of a perfect story of you, even when you think you're getting, you know, or selling to the perfect buyer, it might not always be the case.

00:33:15:17 - 00:33:34:17
John Latella
Right? So you do your due diligence, too. I know they're doing due diligence on your business, but you have to make sure you're doing your due diligence do to make sure that this is the right company and the right person that you're that's taking over, you know, as you so eloquently put your legacy right, to make sure that they're going to continue that and carry that on.

00:33:35:07 - 00:34:02:03
John Latella
And then, you know, the the biggest thing for me in even when I I've given some keynotes and stuff after the fact and whatnot, and I think the most important commodity in our lives is time, right? And you can't ever it's the one thing that money can't buy. So, you know, to me it's take the time to enjoy that ride, but also, you know, our families in things like that, that's one.

00:34:02:03 - 00:34:24:02
John Latella
It's one of the reasons that we, when I chose to celebrate after was going to Italy, the pace of life, they they seemed to do somewhat of a better job, in my opinion, of enjoying the the fruits of their labor and the hard work and the things. We tend to be so focused in America here and just work, work, work, work, work.

00:34:24:02 - 00:34:44:07
John Latella
And, you know, ultimately it's about the the money is an important component of it, but the time and the family and those things are even more so. We only get, you know, my dad's a perfect example that right? You heard me say that he didn't get to experience the the sale, the company that he worked just as, you know, equally hard to build and do.

00:34:44:21 - 00:35:01:10
John Latella
And you know, I remember, you know, he was diagnosed with leukemia. And I want to say going back in 2000 to 2003, and he had all the resources in the world and it didn't make a difference. It just doesn't. So just take the time, enjoy the ride.

00:35:02:13 - 00:35:30:18
Todd Sullivan
Yeah. I mean, from an outsider's perspective, I can't imagine like the enjoyment that he must have had building this iconic brand with his son. Right. So talk about enjoying the ride. I'm sure he was enjoying the ride. So you talk about enjoying the ride, taking time now, but you haven't really, like, gone into retirement, right? So you're active angel investor, but now you got a pretty cool company that I think people really need to know about, right?

00:35:30:18 - 00:35:51:07
Todd Sullivan
Because is the first fantasy platform that I got excited about because all the athletes that I looked at or pay attention to were the ones that I grew up with. And yours is the first platform that lets me bring those athletes like Larry Bird into a game and actually, you know, play a fantasy game. And I hadn't really seen that before.

00:35:51:07 - 00:35:56:05
Todd Sullivan
So maybe you could tell us what what you're spending your time on professionally today.

00:35:56:05 - 00:36:16:00
John Latella
Yeah, I'll give you the quick elevator pitch. So, you know, we found just like with garden fresh with salsa, we didn't create salsa, right? We found a niche and created all natural salsa in the deli. Yeah, well, we'll fantasy sports. We didn't create fantasy sports, but the one thing that all fantasy sports currently are reliant upon is live sporting events.

00:36:16:05 - 00:36:42:15
John Latella
Yeah. So we looked at it and we said, how can we make it so that we can essentially create on demand live sporting events? And so what we've done and what we've created is and patent pending is the ability to play fantasy sports with both live and former or retired players. So essentially, to your point, like you were saying with Larry Bird, you could play on our platforms called Legacy Fantasy sports.

00:36:43:01 - 00:37:01:16
John Latella
You could use Larry Bird in your lineup with Giannis Antetokounmpo in LeBron James. And what we've essentially what the patent is, is it's the extraction of historical play by play data that can be used in a live current fantasy format.

00:37:01:22 - 00:37:03:13
Todd Sullivan
So cool, so cool.

00:37:04:11 - 00:37:06:15
John Latella
Pretty cool. We're pretty excited about it. So yeah.

00:37:06:15 - 00:37:15:23
Todd Sullivan
Because you're essentially enabling anyone to have a live event any time during the year and you're not relegated to like the pro football season or the pro basketball season, right?

00:37:15:23 - 00:37:45:00
John Latella
It's no an entry, right? So we're a non gambling site, but it also could the technology we've created can transcend, you know, work in the gambling world as well. But I'll give you an example. NFL, there's only 77 days of live games in the NFL with our platform. There's 365 because I can create I can replay if the historical play by play data for the NFL goes back 25 years, we could replay the last 25 Super Bowls.

00:37:45:06 - 00:38:00:02
John Latella
Yeah. When when Matt Stafford played in the Super Bowl. The perfect, perfect example was two years ago. Now when he played in the Super Bowl, people were able to play on our platform with Stafford as their quarterback and Calvin Johnson as their wide receiver. And Barry Sanders as a running back.

00:38:00:21 - 00:38:17:00
Todd Sullivan
Is so cool. Yeah, I'm really looking forward to the growth of that business. Well, let me let me ask one last question, which we we like to ask everybody. Is there somebody in your life that you would like to thank Ray for the professional and personal success that you've had over the years?

00:38:17:18 - 00:38:44:17
John Latella
And I mean, yeah, I not I can't I would love to just put it as one, but I've been blessed to have some pretty influential male figures. My dad was one of them, obviously, you know, So I would say my dad and Jack Aaronson, who Jack passed last year as well, I would say the the two of them, you know, between my dad's business acumen and just his example on how to treat people and get things done in business.

00:38:44:17 - 00:39:08:05
John Latella
And then the same with Jack. I mean, just the most generous, big hearted, I mean, just all around good guy that, you know, unfortunately, I don't have the benefit of having either one of them around anymore, other than the fact that I do have some tremendous lessons and, you know, example that I can follow from both of them, that hopefully I'm doing a halfway decent job of that.

00:39:08:05 - 00:39:08:13
John Latella
So.

00:39:09:08 - 00:39:20:22
Todd Sullivan
John, thank you so much for for doing this. Is really I really appreciate how personal you got in sharing all of these experiences. I think people are really going to take something from this episode for sure. So thank you.

00:39:21:05 - 00:39:23:02
John Latella
I it. Todd Thank you for having me on.

00:39:24:20 - 00:39:48:18
Todd Sullivan
Thanks again for listening to the Cashing Out podcast. For more found her exit stories, please subscribe to the Cashing Out podcast on Apple, iTunes, Spotify, or wherever you listen to your favorite podcasts. And please remember exercise dot com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.