Freeman Spogli & Company has acquired Five Star Food Service, an operator of micro markets and other unattended food service venues, from PNC Riverarch which acquired the company in October 2016 from Navigation Capital Partners.
Five Star, the largest franchisee of Canteen Vending Services, a division of Compass Group USA, provides unattended food and beverages though more than 1,350 micro markets, 17,500 vending machines, and 7,300 coffee machines.
The company services over 8,500 customers through a network of 17 branch locations and 300 routes and serves over two million dining meals per year throughout Tennessee, Georgia, Mississippi, Alabama and Kentucky. Five Star, led by CEO Alan Recher, is headquartered in Chattanooga, TN (www.fivestar-food.com)
“Micro markets are a high growth segment of unattended foodservice benefiting from shifting consumer preferences towards snacking, portable meals, and fresh and healthy offerings,” said Brad Brutocao, a partner at Freeman Spogli. “Led by CEO Alan Recher, the Five Star management team has done an outstanding job positioning the company as the leading provider of unattended food and beverage solutions in its geographies. We are pleased to partner with management in the next phase of this exciting growth story and look forward to supporting Five Star as long-term investors in the company.”
“We are thrilled to partner with Freeman Spogli, whose relevant experience in value-added distribution, foodservice, and convenience retail are a perfect fit for the company and will be invaluable resources as we continue to grow the business organically and through acquisitions,” said Mr. Recher.
Freeman Spogli invests in middle market consumer and distribution companies. Since its founding in 1983, the firm has invested over $4 billion in 61 portfolio companies with an aggregate transaction value of approximately $23 billion. The firm has offices in Los Angeles and New York (www.freemanspogli.com).
PNC Riverarch, the seller of Five Star, invests from $10 million to $50 million in privately-held companies headquartered throughout North America. Sectors of interest include 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).
Piper Jaffray & Company (www.piperjaffray.com) was the financial advisor to Five Star.
Financing for the acquisition was provided by Ares Capital Corporation (www.arescapitalcorp.com) and Varagon Capital Partners (www.varagon.com).
© 2019 Private Equity Professional | March 29, 2019
