Burkle to Sell Stake in Food Supplier

Former supermarket mogul Ron Burkle is selling his stake in Irvine-based Golden State Foods for about $110 million, more than tripling his money in a little more than five years.

Golden State is one of the largest suppliers to fast-food giant McDonald’s Corp., providing hamburger patties, buns and condiments such as the sauce for Big Macs.

The company, which operates 11 distribution centers in the United States and overseas and two U.S. processing plants, has 2,400 employees and posted more than $2 billion in sales last year, a Golden State spokesperson said.

Burkle is selling his 51% stake to Wetterau Associates, a St. Louis-based investment group led by Golden State Chief Executive Mark Wetterau. Burkle’s Yucaipa Cos. investment group, along with Wetterau and some Golden State managers, bought the company in 1998 for $60 million and the assumption of an estimated $260 million in debt.

Since then, Wetterau lifted profit and whittled down debt while adding other food service customers, according to a source with knowledge of the privately held Golden State’s finances.

The sale of Burkle’s stake puts the total value of the company at $450 million, according to a spokesman for both Yucaipa and Golden State, who declined to elaborate on that figure or discuss the deal further. The purchase is expected to close this month.

“It’s been pretty wonderful,” said Burkle of his partnership with Wetterau and his family. “It’s a well-run company.”

But, he added, “we had agreed to look at selling to them at some point in time,” when Wetterau could line up the financing. Wetterau and his family plan to hold the company for the long term and “pass it on to their kids,” Burkle said.

Burkle declined to say what he intended to do with the proceeds from the sale, and he declined to discuss his company’s other investments, in such diverse sectors as apparel and entertainment.

He is best known for his wheeling and dealing in the grocery business in the 1990s, which made him one of Southern California’s wealthiest residents. He bought and merged supermarkets such as Alpha Beta, Food 4 Less and Ralphs and recently tried to buy back Dominick’s Finer Foods Inc., a Chicago-based chain that he sold to Safeway Inc. five years ago for $1.8 billion.

Burkle also owns a stake in hip-hop impresario Sean “P. Diddy” Combs’ clothing line, Sean John, and owns Alliance Entertainment, one of the largest recorded-music distributors.