With revenues of $850 million TriMark becomes the largest foodservice equipment and supplies dealer in the United States.
Looking for signs that the foodservice equipment and supplies industry is starting to rebound? Then look no further than TriMark USA's acquisition of Strategic Equipment and Supply Corporation. As a result of this acquisition, the terms of which were not disclosed, TriMark USA will have revenues in excess of $850 million, making it the largest foodservice equipment and supplies dealership in the United States.
"We are very bullish about the market over the next few years. It will not be like it was before but we will see sustained growth," said Jerry Hyman, president and CEO of TriMark USA. "It's clear that things are better. Everyone can feel that and the path forward will be an upward path. If you believe that then the time is now to buy if you feel things are going to keep getting better."
As a result of the deal, Strategic will now go to market as TriMark Strategic. In addition, all of the Strategic personnel, including management, are expected to remain with the company. In fact, Strategic's president Marty Monnat becomes president of TriMark Strategic. "We are only interested in companies that are well run where the existing management team is willing to stay in place. And Strategic definitely fits that criteria," Hyman adds. "Geographically they are in markets where we are not so there was no overlap. They do a significant volume with chains that is primarily equipment. So I thought there might be a fit to leverage those relationships to see if there are smallwares opportunities."
While Strategic is known for its chain business, Monnat points out that only accounts for 50 percent of its revenues. The remainder of Strategic sales come from what Monnat describes as local business. "We operate a local business in virtually every one of our locations," he added.
But this deal was about more than becoming the industry's largest foodservice equipment and supplies dealer. "We did this to have a better presence in the marketplace and support our customer base in a more uniform way across the country," Monnat said. "The fact is there are synergies beyond the basics for us in the form of project design, management and more. It gives us the chance to add value across a broad spectrum of the country. This was a very thoughtful process where we took two businesses that are very much alike and put them together. The cultures of the companies are the same. So there are a lot of factors, beyond the financial, that make this a very compelling deal."
According to Hyman, the Strategic acquisition marks the tenth deal he has engineered while at TriMark and the biggest to date. "Strategic has seen some nice growth. They got hit like we all did in the recession but they have grown over the past few years," Hyman said. "They have a great relationship with their customers and have come out of the recession stronger than when they went in. And we have what we believe is a successful model of acquiring companies and the ones we have bought in the past have all thrived."
As a result of the deal, Strategic immediately becomes part of the NexGen buying group, according to Hyman. Strategic and TriMark were already members of Allied Buying Corporation, another buying group.
Strategic formed in 2000 when independent foodservice equipment and supplies dealers rolled up into one company owned by a Chicago-based private equity firm. Shortly after the company initially formed, Strategic acquired W.H. Reynolds, a Florida-based dealership serving the grocery market. In 2006, Brazos Private Equity Partners bought Strategic. And in 2006 they acquired ISI Commercial Refrigeration, a Texas-based service company.
TriMark now has 1,450 employees and 26 physical locations. TriMark's divisions include TriMark United East in South Attleboro, Mass.; TriMark Strategic in Coppell, Texas, with 12 locations in Texas, Florida, Georgia, Tennessee and Minnesota; TriMark Marlinn in Chicago; TriMark SS Kemp in Cleveland, Pittsburgh and Cincinnati; TriMark Foodcraft in Winston-Salem, N.C.; TriMark Century Concepts in Atlanta; TriMark Raygal in Irvine, Calif.; TriMark Economy Restaurant Fixtures in San Francisco and Sacramento, Calif.; TriMark Gill Group in Crofton, Md.; TriMark Gill Marketing in Phoenix; TriMark RobertClark in Irvine, Calif.; TriMark Federighi Design in Richmond, CA; and BigTray in San Francisco, Calif.