THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, October 15, 1994 TAG: 9410150198
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE AND MYLENE MANGALINDAN, STAFF WRITERS
LENGTH: Medium: 76 lines
The Sandlers, one of the region's oldest and best known business families, are selling their majority interest in Consolidated Foodservice Companies L.P. to their minority partner - Sara Lee Corp.
Virginia Beach-based Consolidated, which distributes food and supplies to institutions and restaurants, is the fourth-largest independent company based in Hampton Roads. It was one of the largest wholesale food distributors in the mid-Atlantic.
Terms of the deal, announced by Chicago-based Sara Lee on Friday, were not disclosed. Sara Lee expects the deal to close by May 1995.
Consolidated will be rolled into Sara Lee's PYA/Monarch Inc. subsidiary based in Greenville, S.C., Sara Lee said.
The Sandler family's company - L.M. Sandler & Sons Inc. - owned 51.1 percent of Consolidated, and Sara Lee owned the remaining 49.9 percent. When the transaction is complete Sara Lee will own 100 percent.
Consolidated officials and Sandler family members did not return phone calls on Friday.
Consolidated, which did about $470 million in sales last year, employs about 420 people in Hampton Roads. In December, Forbes magazine ranked it as the nation's 354th-largest private company.
Sara Lee, with $15.5 billion in sales in the year ended June 30, is a major international food and consumer products company. Besides its namesake, its products include Hanes, Isotoner, Coach, L'eggs, Playtex, Champion, Hillshire Farm, Ball Park and Jimmy Dean. Last year, food service accounted for nearly 10 percent of Sara Lee's sales, or about $1.5 billion.
``Food service is a very small business for us,'' Sara Lee spokeswoman Theresa Herlevsen said. ``We don't consider it a core business, but this acquisition complements our position in PYA in the Southeast. And it allows PYA to utilize economies by combining both operations.''
Consolidated operates as Sandler Foods in Hampton Roads and also owns Nesson Meat Sales Co., based in Norfolk. It also did business as PYA/Monarch in Salem, Va., and Raleigh, and as Coastal Institutional Foods in Walterboro, S.C. Its service area reaches from Delaware to Georgia and west to Tennessee.
While management of Consolidated will move to PYA/Monarch's headquarters, it's unclear what other impact the deal may have in Hampton Roads. ``We haven't announced any of our plans in terms of the business going forward,'' Herlevson said.
Organized in the early 1920s, Sandler Foods evolved from a small downtown Norfolk seafood company into a major wholesaler in Virginia and North Carolina. Most of Sandler's goods are moved by truck from a warehouse at Northampton Boulevard and Diamond Springs Road in Virginia Beach.
Consolidated Foodservice was formed in 1989 after Sara Lee inquired about buying Sandler Foods from L.M. Sandler. The joint venture was designed to expand the two firms business in the Southeast.
When Consolidated was formed, it was estimated to have a market value of $200 million and annual sales of $350 million. In 1991, it purchased Coastal Institutional Foods from Sara Lee. Coastal then had annual sales of about $58 million.
Consolidated Chairman Steve Sandler and Chief Executive Arthur Sandler will continue to have day-to-day responsibilities with the company, Herlevson said.
Once the transaction is completed, the Sandlers will become vice presidents of the firm. PYA/Monarch Chief Executive James R. Carlson will be appointed chairman and chief executive and Mac Pearce, executive vice president of PYA, will be appointed president/chief operating officer.
L.M. Sandler & Sons has many other business interests besides Consolidated Foodservice. It has numerous real estate interests and is one of the largest residential developers in Hampton Roads, doing business under such names as Today Homes and Chesapeake Homes.
It also owns Ocean to Ocean Seafood Sales, a wholesale seafood broker, and is the TCBY Yogurt franchisee in Hampton Roads. by CNB