Trusthouse Services Group, a U.S. middle market foodservice management company, is being acquired by its management in partnership with European contract catering firm Elior SA from the Gryphon Investors equity firm. The acquiring partnership includes Trusthouse CEO/Founder Michael Bailey and the rest of the Trusthouse management team, as well as Elior’s shareholders. The primary shareholders are companies controlled by Elior majority owner Charterhouse Capital Partners and Elior Founder/Chairman Robert Zolade, who are investing directly in the transaction.
Trusthouse will continue to operate as a standalone company in the U.S., concentrating on the institutional side of the business in the Healthcare, Education and Corrections markets. Bailey will continue as the unit's CEO and become a substantial stakeholder in the new company.
"In partnering with Mr. Bailey and his team to develop the U.S. market, we are continuing a long tradition of backing entrepreneurial local management teams," says Zolade. "This approach has served Elior very well over the years. [Trusthouse] is led by an extremely talented team and has a great reputation for quality, service and value. Supported by Elior, we believe that [Trusthouse] has tremendous potential."
"I have known the senior team at Elior for many years and have great respect for them," Bailey adds. "In what has been a robust, competitive process to acquire Trusthouse, I am delighted that Elior has emerged as the successful bidder. For Trusthouse, this gives us the opportunity to combine local autonomy and responsiveness with the backing of a dynamic international group. I am sure it will be a successful combination: good for Trusthouse and, in particular, good for our clients."
Trusthouse ranks at #7 on Food Management's 2013 Top 50 Contract Management Companies listing, with 2012 revenues of $451 million. It was formed in 2008 by Bailey, a former Compass Group CEO, through the acquisition and merger of three formerly independent contract management companies. Since then, it has executed a number of further acquisitions capped by deals for former Top 50 companies A'viands in 2011 and Valley Services last year. The moves have nearly quadrupled Trusthouse revenues from $124 million in 2011 to over $450 million last year.
Elior is reported up for sale, with the transaction being delayed while it completed the deal with Trusthouse, according to Financial Channel . Charterhouse owns 62% of the holding company that owns Elior, with Zolande owning another 25%. They had taken publicly held Elior private in 2006 in a 2.5 billion Euro deal.
Elior traces its origins to 1991. It grew through a series of acquisitions of various European contract firms to become one of the major contract foodservice firms in the world . It currently has around $6 billion in annual revenues operating contract and concessions businesses in Europe and the Americas. Its presence in the U.S. consists of operations in some 15 airports and in managing some highway travel plazas.
The completion of the transaction remains subject to the satisfaction of customary closing condition, including the receipt of regulatory approvals.