New Heritage Capital has finalized the sale of Continental Services, a Detroit-based corporate foodservice provider, to Morgan Street Holdings. New Heritage Capital acquired Continental Services in February 2017.
Continental Services is one of the largest corporate foodservice providers in the Midwest and one of the largest Compass Group franchisees. The company offers various services to its clients, including corporate cafés, grab-and-go markets, vending, office coffee, and special event catering.
Serving clients across Michigan, Indiana, Ohio, Pennsylvania, and New York, Continental employs over 1,500 people and operates 28 distribution centers. The company was founded in 1989 by Jim Bardy and is headquartered in Detroit.
According to Matt Hubbard, the CEO of Continental, the company has achieved significant growth under New Heritage’s ownership. This growth includes expanding into new territories within the Compass system, optimizing its distribution model through data-driven technology solutions, and providing innovative food-at-work offerings for employers of all sizes.
“Heritage was a great partner throughout that evolution, and we could not be more excited to partner with the Morgan Street Holdings team to continue our journey over the long term,” said Mr. Hubbard.
During New Heritage’s tenure, Continental completed ten add-on acquisitions. These included Northern Vending Company of Ann Arbor, Michigan, in July 2019; Sterling Services of Canton, Michigan, in March 2019; United Vending & Market Services of Ferndale, Michigan, in November 2018; Metro Vending Service of Roseville, Michigan, in April 2018; 24 Hr. Vending of Brighton, Michigan, in January 2018; and Satellite Vending Company of Wixom, Michigan, in September 2017.
“When we invested in Continental, it was a strong business in the Michigan market, approaching corporate food service with unique culinary capabilities,” said Melissa Barry, a partner at New Heritage. “Together with management, we have helped Continental to become an even stronger regional player utilizing industry-leading technologies and systems to serve customers across multiple states and end markets with the highest service and quality. We look forward to seeing the wonderful things Continental achieves in the future.”
New Heritage Capital, based in Boston, invests between $15 million and $40 million in minority or majority equity in companies with $4 million to $20 million in EBITDA. The firm focuses on sectors such as business services, healthcare, and manufacturing. In December 2023, New Heritage closed its fourth fund, New Heritage Capital IV LP, which exceeded its target with $438 million in capital.
Morgan Street Holdings, headquartered in Chicago, is the holding company and investment arm for the HAVI Group of businesses. Its portfolio includes HAVI Supply Chain, a provider of supply chain, logistics, and distribution services for McDonald’s; TMS, a customer-focused integrated marketing services provider; and Stanley, a developer and marketer of indestructible water bottles. Morgan Street invests in companies with at least $15 million in EBITDA, with specific interest in sectors such as supply chain, logistics, distribution services, marketing, and consumer products.
Lazard Frères served as the financial advisor to New Heritage and Continental, while Metronome Partners advised Morgan Street Holdings on the transaction.
© 2024 Private Equity Professional | November 19, 2024
