Leading independent caterer and Royal Warrant holder, CH&Co, has announced that it is to merge with the HCM Group (Host Catermasters Group) in a deal which gives the new combined business a turnover approaching £200m, and a team of 4,500 providing services to over 400 operations across the UK and Ireland.
The new company will be called the CH&Co Group and it will be headed up by HCM’s CEO, Bill Toner, who will now be Group CEO, with CH&Co’s Co-Founders, Robyn and Tim Jones, continuing in their previous roles as Founder and Chairman respectively.
The deal comes together against a backdrop of an increasingly competitive industry where consolidation is the perfect answer for mid-sized independents ready to take on the largest competitors. According to Bill Toner, the deal makes perfect sense for both companies. “This merger between CH&Co and HCM Group enables both companies to combine their assets and talent and have the financial strength to compete even more vigorously. We are so much stronger together but although we’re now a bigger company, we’re still made up of a number of smaller, well-established, high calibre brands focussed on providing excellent food and service, and with a reputation for looking after clients and customers. For example, we have Ampersand, Charlton House, Lusso, Chester Boyd, Via 360 and ITA within CH&Co, and Host, Catermasters and Couture within HCM Group. We cover the spectrum from consumer and fully commercial to fixed cost catering for some of the UK’s leading brands and organisations across the business, charity, leisure, education and healthcare sectors.
”Combined, we have an even stronger management team with the credentials to expertly manage business for clients in all these sectors and we now have the scale to successfully mobilise the largest group contracts and provide a real alternative to the big companies.”
Robyn Jones, OBE, explained that for her and Tim, the merger was an important element of determining the long-term legacy of the company they started in 1991. “As we’ve been working closely over the past months bringing the deal together, it’s become increasingly clear that the senior management teams of both companies are working well as one team and share the same values for client and customer relationships, corporate responsibility, and team development, and that’s good news for all our stakeholders. Whilst a merger like this will bring some inevitable change while we integrate our companies, that is also a time of opportunity for our teams as we adapt and fine-tune our focus on providing the best food and service to our customers and clients.”
The existing executive management teams of both CH&Co and HCM will remain largely in position but Stuart Lawson, CH&Co’s current Group Chief Executive, is leaving the business in due course having overseen a number of strategic changes and brand reviews within the company over the past 18 months. Tim Jones added, “Stuart has played a key role in getting CH&Co ready for this major transition and we’re grateful for the leadership and support he has given us and we wish him every success in his next endeavours.”
There has been speculation for well over a decade about when CH&Co would be acquired but the company has never sought that route, although it has itself acquired several businesses over the years. The consolidation of small and mid-sized independent food and service operators as a mechanism to fuel growth and effectively tackle competition from the larger companies is being seen as an attractive option in a very challenging marketplace.
Tim Jones explained, “We’re starting to see more consolidation in our industry, some of which is through new entrants to our market, and we want to be leading this because there are only so many opportunities to build on this scale. Between our two companies, we have an excellent track record of long standing client relationships and we’re now represented across a wider range of hospitality sub-sectors than either company was before, which also gives us the operational scale on a national basis to compete even more effectively.
“Both organisations have excellent client retention records and we have a very experienced management team across our new company with in-depth experience of mergers and acquisitions, and post-deal integration. We’re very confident that this merger will go smoothly and both companies will become even stronger as one entity.”
Both CH&Co and HCM have enjoyed significant success in recent months with a combined £42.8m achieved in new sales and retention since January this year, including £19.6m in new deals and £23.2m in retained contracts.
The new CH&Co Group is predominantly management owned but the deal has also been funded partly by MML Capital, which provides capital to private businesses for expansion, acquisitions, recapitalisations and management buyouts. Richard Mayers and Ian Wallis from MML will also join the CH&Co Group board as non-executive directors and provide counsel on growth strategy. Other non-executive members of the Board include Elizabeth McMeikan and Simon Hodson.