Venture 7 Advisors recently announced the acquisition of Central New York food distributor Carlo Masi Sons & Daughter by private investor Samuel DiSalvo. For obvious reasons, the company is now known as Carlo Masi Produce.
Venture 7 served as the exclusive financial advisor to the Masi family in the transaction. Sam Masi was the company president and Samuel DiSalvo is the buyer. To avoid confusion during the process, they agreed to be called Sam and Samuel. After the closing, we talked with the seller and the buyer. Read their comments below.
The Company was founded in 1958 by Carlo and Elizabeth Masi, selling produce out of their garage to local stores and foodservice customers. Before starting the business Carlo worked with his father Vito as a house-to-house peddler, selling food to local migrant workers. As the world and technology changed, so did the business. In 1960 they were first company in Central NY to invest in refrigerated trucks. As the family grew, the children got involved the business. Until the recent sale, the business was owned by four of Carlo and Elizabeth’s seven children. They sell a complete line of fresh fruits and vegetables, along with dairy, meats and paper products.
We sat down recently, after the closing, for conversations with former president Sam Masi, and with the new owner, Samuel DiSalvo.
From our conversation with the seller, Sam Masi:
About the decision to sell the company I’ve never received a paycheck from anyone except the Carlo Masi company, and I’ve been doing this for over 40 years. I’ve been making good money and I could see what needed to be done to grow the company, but I honestly didn’t have the energy to make the big changes in the business. I decided to find a buyer with the drive to make things happen. But this business is in my blood, and I hoped I could stick around to do the things I know and love, but on a reduced schedule. And that’s exactly what happened. I also added a significant cushion to my retirement fund!
How the business has changed
Since the pandemic, the biggest change has been the cost of labor, and how that affects our service. Many of our customers are small-to-midsize restaurants, schools, institutions and retail stores, and we built the business by accommodating their orders, no matter how small: You want three heads of lettuce? No problem. But with staff so hard to find and wage expectations so high, we just can’t pay a guy $30 an hour to break open cases of lettuce, and we can’t keep up the same frequency of deliveries. So our customers have to accommodate their operations to what we can do. We now have pre-set order quantities that we can put up in advance, like 4’s, 12’s or cases. And that means less customer picking and packing.
People like us – me, my brothers and my sister – we grew up in this business. We’ve been doing things the way we do them for a long time. We know how to make money, but we haven’t managed scientifically.
Our new owner, Samuel, comes from an accounting background, and he’s getting a better handle on our actual expenses and the margins we need to make on different products. He runs scenarios about price/volume changes that we can test out in the market. He’s working on a lot of back-office things, IT projects, and hiring. So all of that is off my shoulders, just as I hoped.
How the business has not changed
We have deep roots in the communities we serve, and we’ve always been committed to delivering quality product. We’ve had a lot of the same customers and vendors for many, many years, and they’re our friends. Those relationships sustain our business, so the fact that I’ve been able to keep that continuity under the new ownership is important.
How things have worked out
My brothers and sister and I are very fortunate. The guy we’re working for now is working hard, he’s a really nice guy, and we couldn’t have found a better fit. He brought new energy to the business, and I’m very motivated to help him get things moving in new directions. He didn’t come from inside our industry so we’re all helping him get up to speed. I can handle my workload in 25-30 hours a week, and eventually I could do most of it remotely. Next winter I’ll probably be working from Florida. The whole thing couldn’t have worked out better.
Working with Venture 7 Advisors
Anybody who thinks they can do a “for sale by owner” business sale is just wrong. There were so many ins and outs, so many problems that popped up that you guys ironed out. There’s so much specific expertise required, so no way could we have done it on our own. The combination of rising interest rates and the hesitation in the overall business environment might have lowered our “take”, but we’re 100% satisfied with the way you managed the process.
From our conversation with the new owner, Samuel DiSalvo:
Growing up, my parents had two small businesses that did pretty well, and I always wanted to own a business myself. But my career went in different directions. When I reached a certain age and my kids were grown, I decided that the time was right to pursue that dream. I looked at a few companies, but then Covid hit and everything shut down. Eventually I came across a notice from Venture 7 about an unnamed grocery distributor “in Central New York” which sounded like the kind of thing I was looking for, and it wasn’t far from Rochester where I was living. And the rest is history – a long history.
What do you mean by a “long history”?
I contacted Venture 7, signed an NDA and was glad to find that the business is a successful, going concern. But the process took much longer than any of us expected. There was a long and very detailed due diligence process, and we ran into some environmental issues on the site that had to be dealt with, which took up a fair amount of time. Meanwhile interest rates were rising, which complicated financing and the schedule slipped into the fourth quarter of 2022 when everybody was jammed up - the lawyers on both sides, the bank, etc. We finally closed the deal on December 30, 2022.
So, how's it going?
It’s going very well! The company has been firing on all cylinders all along, and that has continued since I arrived.
Fortunately the Masi family is still here doing what they do so well — buying product, selling, managing customer relationships. They always relied on an outside accountant, so I’m spending time getting back-office things lined up — more robust accounting practices and IT and network infrastructure. The company was managed by three brothers and a sister, and their close relationship provided the company’s checks and balances. Now I’m building more formal checks and balances into our operations.
At the same time, I’m learning more about the business every single day. I inherited an awesome team here, and everybody’s very motivated to do right by our customers — from our guys on the shipping dock to our drivers to the people on the phones. We’re working hard to not let anything slip through the cracks.
I understand that Sam wanted to reduce his hours and his stress level after leading the business for so long, and I’m doing everything I can to make that happen. He and Debbie and Jerry have been very, very supportive of my transition. Sam’s been in this for forty years and there’s a lot in his head. He’s not obligated to stay on, but he wants to. I feel like almost a member of the family now and there’s a lot of mutual respect all around. We’re actually having fun, and the experience is shaping up to be all I hoped it would be.
About working with Venture 7
I can honestly say that you guys have been fantastic. We were on opposite sides of the table, and you did a REALLY good job representing your client and negotiating for them. But the way Bryan and Scott ushered the deal through a lot of ups and downs was amazing. I respect your attention to detail and it was obvious that you guys have been through this many times.
It's all good!