PNC Riverarch Capital has acquired Five Star Food Service from Navigation Capital Partners. HarbourVest Partners, Five Points Capital and the management team of Five Star were equity co-investors alongside PNC Riverarch.
Five Star is a provider of on-site food and beverage services to employers and other commercial, institutional, and educational locations across the southeastern United States. The company is a franchisee of Canteen Vending Services – the largest vending company in the US – and has more than 5,500 customers that operate in the vending, micro market (in-house self serve vending), office coffee, and dining industries. Five Star has 12 branches and employs over 700 people that staff 300 vending routes, serve 200 micro-markets, and operate 36 cafeterias. The company, led by CEO Al Recher, was founded in 1993 and is headquartered in Chattanooga, TN (www.fivestar-food.com).
Five Star also operates a culinary center in Lafayette, GA where the company processes and packages more than 5 million food items a year including sandwiches, wraps, hamburgers, hot dogs, salads, and desserts. These food items are sold through the company’s vending network as well as to other food vending operators.
The transaction for PNC Riverarch Capital was led by Michael Hand, Managing Director; Robert Dolan, Director; Patrick Sturm, Senior Associate; and Zachary Mittelmark, Associate. “In evaluating this transaction, we were particularly attracted to the company’s management team, market leadership position, and customer relationships,” said Mr. Hand. “We are immediately pursuing multiple add-on acquisition targets and have a healthy appetite for additional opportunities.”
PNC Riverarch invests from $10 million to $50 million in privately-held companies headquartered throughout North America. Sectors of interest include consumer products, outsourced services, specialized manufacturing and value-added distribution. PNC Riverarch is a division of PNC Capital Finance which in turn is a subsidiary of The PNC Financial Services Group (NYSE: PNC). PNC Riverarch is based in Pittsburgh (www.pncriverarch.com).
HarbourVest invests in venture capital, buyout, mezzanine debt, credit, and real estate through primary fund investments, secondary purchases, and direct co-investments. The firm has offices in Boston, London, Hong Kong, Tokyo, Bogotá, Beijing, and now Toronto (www.harbourvest.com).
Five Points Capital invests in equity and subordinated debt in lower middle market buyout, acquisition, growth and recapitalization transactions as a control investor on a standalone basis or as a co-investor with other financial sponsors. Sectors of interest include business, healthcare and industrial services, niche manufacturing, value-added distribution and education and training. The firm is headquartered in Winston-Salem, NC (www.fivepointscapital.com).
Navigation Capital Partners (NCP), the seller of Five Star, invests in companies that have enterprise values below $75 million and revenues of under $150 million. Sectors of interest include specialty finance and payments; digital/media; industrial services; transportation and logistics; and value-added distribution. NCP is headquartered in Atlanta (www.navigationcapital.com).
The managers of NCP formerly founded and managed Mellon Ventures, the private equity investment partnership of Mellon Financial Corporation. With the backing of Goldman Sachs, NCP acquired the private equity portfolio of Mellon Ventures in December 2006. Mellon Ventures first invested in Five Star in 1996 and NCP recapitalized the company in 2009.
Senior debt financing for the transaction was provided by Twin Brook Capital Partners (www.twincp.com), NXT Capital (www.nxtcapital.com) and MidCap Financial Services (www.midcapfinancial.com).
© 2016 Private Equity Professional • 11-3-16
