Centerplate Signs Merger Agreement With Kohlberg & Co. Affil
By Don Muret, Staff Writer, SportsBusiness Journal
Sports concessionaire Centerplate announced late Thursday that it had signed a definitive merger agreement with an affiliate of Kohlberg & Co., a private equity firm, whose properties include skatemaker Bauer Hockey and Central Parking, operator of parking facilities in 28 NFL markets. Kohlberg, pending shareholder approval, will buy financially strapped Centerplate in a cash deal through a debt tender offer and the purchase of Centerplate's outstanding stock. Centerplate's stock is an income deposit security, which combines common stock with a bond. The transaction, financed by Kohlberg through a combination of equity and debt financing, is expected to be completed in the first quarter of '09, Centerplate officials said. It is too early to tell what effect a sale of Centerplate would have on its 22 major league food accounts, including the Nationals, its most recent MLB client. Several teams and facilities have clauses that give them the right to find another concessionaire if Centerplate is sold. "We will be awaiting further details and following them closely," said Nationals President Stan Kasten. Food consultant Chris Bigelow said the possibility exists that Kohlberg, a company with no experience in arena and stadium food and retail operations, could "buy Centerplate, fix them up and sell them" to an industry competitor. The same thing happened to Volume Services when Bigelow worked for that company, a precursor to Centerplate, in the early '80s. "Having lived through a few of those ... it was 'always for sale,' let's put it that way," Bigelow said. "I don't think you can look at this as a long-term solution." Aramark, Delaware North Sportservice and Comcast-Spectacor's Ovations Food Services took a look at buying Centerplate when UBS Investment Bank was shopping it earlier this year, but those three food providers decided against making an offer for the company. "Obviously, none of Centerplate's competitors could figure out a way to make it profitable," Bigelow said.
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