A Los Angeles equity firm is buying the biggest vending machine vendor in the Southeast to help further grow the Chattanooga business.
Five Star Food Service, Inc., announced Friday that it has been acquired by Freeman Spogli & Company, management and other investors. Financial terms of the purchase were not disclosed.
Five Star, which started in 1993 and has grown to serve more than 8,500 factories, businesses and other customers with its micro maqrkets, coffee machines and other employee food options, is the largest franchisee of Canteen Vending Services, a division of Compass Group USA, Inc. The company was previously purchased in 2016 by another private equity firm, PNC RiverArch Capital.
In this 2015 staff file photo, Five Star Food Service CEO and President Alan T. Recher is shown in the company's offices in Chattanooga, Tenn.Company at a glance
Name: Five Star Food Service Inc.Ownership: Freeman Spogli & Company, management and other investors bought the firm Friday from PNC RiverArch Capital, which had owned the company since 2016Headquarters: ChattanoogaFounded: 1993Number of customers: Over 8,500 factories and work sitesSales: The company operates 350 micro markets, 17,500 vending machines, 7,300 coffee machines and serves more than 2 million dining meals per year in Tennessee, Georgia, Mississippi, Alabama and Kentucky.Franchise: Five Star is the largest franchisee of Canteen Vending Services, a division of Compass Group USA, Inc.Staff: Nearly 1,500 employees at 17 branch locationsCEO: Alan T. Recher
"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 Alan Recher, CEO of Five Star.
Five Star has grown both organically and through more than 60 acquisitions in its 26-year history, including its 2017 purchase of the Chattanooga Coffee Co. The Chattanooga-based company has nearly 1,500 employees who prepare and deliver foods to work sites and other community facilities in six states through 17 branch locations.
Five Star Food Service is the biggest operator in the Southeast of self-service micro markets that offer work sites a bigger variety of food and snack options and allow employees to swipe their purchases and pay with cash or credit cards, providing easier and faster purchasing than conventional vending machines.
"Micro markets are a high growth segment of unattended foodservice benefiting from shifting consumer preferences towards snacking, portable meals, and fresh and healthy offerings," Brad Brutocao, a partner at Freeman Spogli, said in a statement announcing the purchase. "The Five Star management team has done an outstanding job positioning Five Star as the leading provider of unattended food and beverage solutions in its geographies."
Brutocau said the new owners are "long-term investors in the company" and want to support further growth for the Chattanooga company.
Freeman Spogli & Co. is a private equity firm dedicated exclusively to investing in and partnering with management in consumer and distribution companies in the United States. Since its founding in 1983, Freeman Spogli has invested $4.5 billion in 61 portfolio companies with aggregate transaction value of over $23 billion.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.