Oct 18 (Reuters) - Redwood Holdings, the family office set up by billionaire cousins and staffing industry veterans Jim Davis and Steve Bisciotti to invest their wealth, has agreed to buy food ingredient company Newly Weds Foods for about $4 billion, people familiar with the matter said.

The deal, one of the biggest to be carried out by a family office, underscores how these investment vehicles have accumulated resources and capabilities for large buyouts that have typically been the domain of private equity firms.

By cutting out buyout firms as middle men, Redwood can save big on fees. Redwood does not disclose information about its assets and staff, and it did not respond to requests for comment. Newly Weds Foods declined to comment.

Newly Weds Foods Chief Executive Officer Brian Johnson will continue to lead the company once the deal is completed, the sources said. The company is owned by the Angell family, and explored a sale after Charles Angell, who took over the business from his father Paul, died last year.

Paul Angell founded the Chicago, Illinois-based company in 1932. He developed a technology that allowed sheet cake to be rolled without cracking and combined with ice cream.

Under his son, Newly Weds Foods grew from one batter and breading plant in Chicago to 29 plants making a variety of food ingredients.

Davis co-founded North America's largest staffing business Allegis Group with Bisciotti in 1983 in Maryland. Forbes pegs Davis' and Bisciotti's net worth at $4.2 billion and $7.1 billion, respectively. Bisciotti is the majority owner of American football team the Baltimore Ravens.

Redwood's other investments include flour miller Grain Craft, a beer distribution company and several brands acquired from lifestyle apparel, footwear and accessories company VF Corp . (Reporting by Abigail Summerville in New York Editing by Chris Reese)