In a deal that fortifies the chain restaurant segment of its foodservice distribution business, Services Group of America announced the planned acquisition of Portland, Oregon-based McCabe’s Quality Foods.

The agreement will make McCabe’s Quality Foods the chain restaurant specialty operation of Services Group of America, adding a projected $151 million in annual sales to its family of companies that, including its broad-line foodservice distribution subsidiary Food Services of America, currently generate more than $1.3 billion in annual revenue. The terms of the deal were undisclosed and transaction is expected to close in October.

“The McCabe acquisition strategically strengthens our chain restaurant specialty in the western U.S.,” said Service Group of America chairman, Thomas J. Stewart. “It will operate independently from Food Services of America but will provide an important added dimension to our market-leading foodservice distribution business.”

As a part of the Services Group of America family of companies, McCabe’s Quality Foods will keep its name. For the next several months, McCabe’s president, Jan McCabe will remain with the company during transition.

Founded in 1967 as McCabe’s Quality Meats, the company was renamed in 1984 to McCabe’s Quality Foods and became a leading provisioner for fast food restaurants in Oregon, Washington, western Idaho, Alaska, Hawaii and the Pacific Rim. Serving major national and regional fast food chains such as Burger King, Wendy’s, Arby’s, Burgerville USA and Arctic Circle, McCabe’s Quality Foods’ sales increased in 1999 to $147 million. According to a leading industry publication ranking of the nation’s largest systems distributors, McCabe’s Quality Foods ranked 9th. It is also listed in the top 50 of Oregon’s largest private companies.

The acquisition brings the estimated annual revenue for Services Group of America to over $1.5 billion, reinforcing its position as one of the nation’s largest privately held corporations. The company’s largest operation, Food Services of America, is the nation’s 6th largest broad-line foodservice distributor serving a wide range of commercial and institutional customers including restaurants, hotels, hospitals, schools, cruise lines, government facilities and military installations. According to Stewart, while operating separately, the McCabe’s acquisition strengthens the company’s overall foodservices distribution business in the 15 western and mid-western state region it now serves while adding export sales to the company’s range of professional services.

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By GlobalData

Seattle-based Services Group of America is the largest privately held corporation in the state of Washington and is ranked by Forbes Magazine as the 129th largest of the nation’s top 500 private companies. Among its holdings, Services Group of America operates businesses in foodservice distribution, fresh fruits and vegetables marketing, commercial facilities construction and management, trucking services brokering and business travel services.