Varagon Capital Partners served as joint lead arranger and joint bookrunner on financing to support Freeman Spogli & Company’s acquisition of a majority interest in Five Star Food Service. Ares Capital also provided financing.
Freeman Spogli & Company acquired the company alongside management and other investors. Financial terms of the transaction were not disclosed.
Headquartered in Chattanooga, TN, Five Star provides unattended food and beverage solutions in the Southeast, operating over 1,350 micro markets, 17,500 vending machines, 7,300 coffee machines and serving over two million dining meals per year throughout Tennessee, Georgia, Mississippi, Alabama and Kentucky. It is the largest franchisee of Canteen Vending Services.
“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 Five Star 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.”
Alan Recher, CEO of Five Star, added, “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.”
Morgan, Lewis and Bockius acted as the legal advisor to Freeman Spogli & Company. Finn Dixon & Herling and Evans Harrison Hackett acted as the legal advisors to Five Star and its controlling shareholder and Piper Jaffray & Company as its lead financial advisor.
Founded in 1983 with offices in Los Angeles and New York, 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.
Varagon is a lender to middle market companies and private equity firms. The firm invests across the capital structure and delivers flexible financing solutions that meet the needs of its private equity partners.