Purchasing the Rhode Island-based company could be a harbinger of things to come.
Sam Tell and Son affiliate Warren Acquisition LLC, has acquired the assets of Paramount Restaurant Supply Corp., a foodservice equipment and supplies dealership with offices in Warren, R.I., Phoenix and New York City. Terms of the self-funded deal were not disclosed.
Led by Brian Barer, its current COO, Paramount Restaurant Supply will continue to operate under the same name from its current locations and with its current staff and go to market as a separate company, according to Marc Tell, president of Sam Tell and Son.
Founded in 1940, Paramount reported annual sales of $46 million in 2012, making it the 27th largest dealer in the country, according to FE&S' 2013 Distribution Giants Study. Sam Tell and Son reported sales of $41.49 million, making it the 30th largest dealer in the country.
Despite being similar in size, the two dealerships approach foodservice equipment and supplies sales differently. Restaurant chains account for 85 percent of Paramount's commercial restaurant sales, according to data the company submitted for FE&S' 2013 Distribution Giants study. In contrast, independent operators account for 96 percent of Sam Tell's commercial restaurant sales.
"They have a different business model and that's exactly why we acquired them," Tell said. "Their strengths are completely different from ours. Their customers are different from ours. Yet we use the same vendors. So you could not find a better fit. We are in the same area and yet we don't sell to the same customers. They have incredibly talented people over there that have good relationships with their customers."
According to Tell, the Paramount deal is a sign of things to come for Sam Tell and Son. "We are not even close to being done," he said. In the past three years, Sam Tell and Son has opened three operating companies, including an e-commerce unit, a consulting and sales unit and now Warren Acquisition, which it used to buy Paramount. "I would not be surprised if we acquired three more companies in the next three years," he said.
So what makes now such an opportune time to grow via acquisition? "We look for good opportunities and good fits. I don't think the time was ever wrong for us to buy. That's changing now and we see an opportunity," Tell said. "The best way to describe it is if people are ready to jump we are ready to catch them. And the past few years, people were not ready to jump."