Elevating corporate foodservice to a whole new level
Continental Services provides its corporate clients with flexible and high quality food-at-work services, meeting a fundamental need of employers to recruit, retain and engage employees. As the second largest franchisee of the Compass Group plc in the U.S., Continental provides corporate food service through its refreshments, workplace dining and managed venues & events business segments.
Successful founder looks for partner for growth
Founded in 1989, Jim Bardy started Continental as a small corporate vending business and built the company over decades into the leading Midwest corporate foodservice provider. Jim had built a strong leadership team at Continental and had completed more than a dozen tuck-in acquisitions but wanted a partner that could accelerate the company’s inorganic growth strategy.
We invested with Continental’s founder-owners in our Private IPO® in January 2017, providing Jim and his shareholders the liquidity they desired but also allowing them to retain control of their board and their future growth plans. Collectively, we laid out a strategic plan to acquire additional tuck-in acquisitions in Michigan, with a broader goal to increase the company’s geographic reach into new territories.
Investment thesis centered on inorganic growth
The corporate foodservice industry has great tailwinds, with companies upgrading their employee food experience as a way to help recruit, retain and engage employees. Continental improved those experiences for employers converting traditional vending into preferred micro-markets and upgrading workplace dining experiences. At its core, Continental was a logistics business, with expertise in purchasing, inventory management, and route-based distribution. Therefore, completing tuck-in acquisitions of smaller foodservice companies had great synergies. With a proven acquisition model, we saw opportunity to realize significant inorganic growth and synergies.
Working together to drive equity value
The board worked together to drive both organic and inorganic growth. A new CFO and divisional leaders were added to the leadership team, and the formation of an acquisitions integration team was put in place to streamline acquisition diligence and integration activities. Together with the board, the CFO brought on new tools to help forecast and manage the business and new systems were implemented to streamline reporting. In 2020, our CEO founder transitioned to a Chairman role, with the existing President rising into the CEO role. Supported by a strong team and a flexible debt financing structure which the board put in place, the company executed on nine strategic tuck-in acquisitions plus completed two transformative acquisitions, expanding Continental’s footprint into Ohio and Indiana. While all the acquisitions brought purchasing synergies and meaningful route density efficiencies, the new geographies mapped out a future long term growth strategy that could repeat Continental’s success in Michigan.
Outcome
A new partner for continued growth
Continental more than tripled its EBITDA during our investment period and grew into the largest independent foodservice provider in the Great Lakes Region. In September 2024, Continental was sold to a financial buyer who, together with the existing leadership team, is excited to support its future growth.
