Matrix Capital Markets Group (804) 780-0060 - Case Study: Donsons Distributing

Case Study: Donsons Distributing - Exclusive Sale

Situation

Founded in 1957, Donsons was a leading independent broadline foodservice distributor serving eating establishments, healthcare facilities, schools and institutions located along the Rocky Mountain Front Range. The Company had grown organically and through acquisitions to approximately $50 million in revenues. However, it was operating in an industry experiencing hyper-consolidation, and management began to realize that a lack of scale was going to limit future growth and profitability. Further, the primary owner had grown-up working in the business, and he was seeking a liquidity event to diversify his personal net-worth.

Objective

Donsons engaged Matrix to assess all strategic alternatives in order to maximize shareholder value. Management determined that it was in the best interest of the shareholders to seek a merger partner or an outright acquirer.

Solution

In order to maximize shareholder value, Matrix developed an approach that sought a wide range of potential buyers, including private equity firms, large strategic buyers, niche distributors and select branded food manufacturers.
The ultimate buyer was Denver based Vistar Corporation, which is a portfolio company of Wellspring Capital, a private equity firm. Vistar is a leading distributor of food products and other supplies to targeted specialized segments of the away-from-home food market: pizza and Italian restaurants, vending operators, theatres, sandwich chains, office coffee service operations and arena and concession operators.
The acquisition of Donsons by Vistar was a strong strategic fit as Donsons provided Vistar a much needed best-in-class distribution facility and a greater penetration into Denver’s independent restaurant market. Vistar paid approximately 8.0x Donsons historical adjusted EBITDA.