BREAKTHROUGH DEAL OF THE YEAR HONOREE:
Highlander Partners, LP acquires Tapatío Foods, LLC
BUYER: HIGHLANDER PARTNERS, LP
SELLER: TAPATÍO FOODS, LLC
DEAL TEAM: Jeffer Mangels & Mitchell LLP; Katten Muchin Rosenman LLP; Stout
Highlander Partners, L.P., a private investment firm, acquired a controlling interest in Tapatio, the #5 hot sauce brand in the US, from the Saavedra family. The Arnold Companies also invested a significant minority equity position along with Highlander, and the Saavedra family retained a minority position in Tapatio post-closing. This was a high stakes and high-profile transaction for both buyer and seller. For the sellers, there was the cumulation of over five decades of work by the Saavedra family. For the buyer, this was a platform transaction that they intended to use to acquire more businesses. The transaction was closed on a tight deadline and achieved the financial targets of the family while also getting the buyer comfortable with some of the shortcomings of buying a true family operated business (e.g.: lack of GAAP financials or many written records). As a family run business, one of the challenges was getting the buyer comfortable with how the family operated the business. For example, the recipe for the Tapatio hot sauce was a fiercely guarded secret and, even with an NDA in place, the family was not comfortable releasing the recipe itself until shortly before the closing. This was, literally, the company’s “secret sauce.” In fact, the exact recipe was transmitted only by word of mouth until 2026, when it was written down at the time of the sale.
