Host Management and Catermasters announce merger 05/06/2014

Host Management and Catermasters announce merger

Host Management and Catermasters have announced that they are to merge to create a company called HCM Group in a deal which gives the new business a turnover in excess of £60m, more than 240 operations, and a combined team of more than 1500 employees.

Catermasters was established by Nigel Johnson and Richard Moody in 1989 and the company is now a national caterer, operating across 120 sites and with a team of over 550. Host Management was established in 2004 and is now headed up by Chief Executive Bill Toner. Host also has 120 operations across the UK and Ireland and a team of 1000. The new HCM Group operates in multiple sectors including Business & Industry, conference facilities, leisure, independent schools, further and higher education, and the healthcare sector.

The new company will be headed up by Bill Toner as Chief Executive Officer with Nigel Johnson taking the role of Deputy CEO. Both leaders are strong characters but according to Johnson, Bill Toner was the natural choice for CEO, "Bill has a huge amount of experience of growing catering companies to a significant size and therefore our newly merged company will use his skills to the full. Given the size of our combined business, we now have the very exciting prospect to create focused B&I, Education, Leisure and Healthcare divisions, which will be the team's top priority in the coming months and Bill and I will be working closely on capitalising on these new opportunities."

Catermasters other founder, Richard Moody, has been less involved in the business over recent years and as a result of the merger has sold his remaining shares to HCM Group, but he will continue to be involved as a consultant. Meanwhile, Catermasters Joint Managing Director, Tony Carr, will continue to manage that business.

Toner added, "This is a very exciting move for both Host and Catermasters and strategically and operationally, this merger is an excellent fit. We are similar sized, high quality caterers and we share the same client-focussed culture and business ethos. This merger will help us grow much more quickly and we're all very excited by the future possibilities in our chosen segments.

"Our companies have an excellent track record of client retention and organic growth and we've also both enjoyed successful expansion through acquisition – Catermasters, with its purchase of the City-based In House Catering Company in 2008 and Bite in 2013, and Host's acquisition of caterers Couture and Juice for Life in 2012, and the Style Services business in 2013."

Both companies' recent acquisitions have enabled them to win successful tenders for larger contracts in new parts of the country. Last year, Host was awarded the SSE group contract adding £20m turnover over a five-year contract, also taking it for the first time into Ireland. Its catering contract at Salford Royal NHS Foundation Trust also added £10m over a five-year contract and in July, Host announced its largest contract win to date for the eight-year, £16m turnover, Spectrum Leisure Complex in Guildford. So far this year, Catermasters has won over £6m worth of business, including a major five-year contract for the UK headquarters in London of global marketing and communications firm, Young & Rubicam, Freeman UK, University of Law, and Holiday lettings.

"It's very much business as usual where our clients and team members are concerned," Johnson explained, "however, there are aspects that both businesses can learn from each other so behind the scenes, we will be adopting the best initiatives and systems from both organisations so that all clients and teams benefit from our mutual experience. Initially, my focus will be on ensuring that the merger is seamless for our clients and I'll be working with our teams to identify and share this best practice. After that, I'll be working with Bill and the team to identify new strategic opportunities for us to grow our company, and that is an exciting prospect."

According to Johnson and Toner, the future is looking very positive, "HCM Group's new combined turnover pushes us into a different league creating a new more rounded organisation with specialists in multiple sectors of hospitality, from B&I to healthcare; leisure to education. This enables us to effectively compete with the biggest players in the increasingly competitive contract market. We have a skilled management team and we will now have lots of growth opportunities for people at all levels of the organisation.

"We're all very much looking forward to working with each other and taking our merged business to new heights. Our focus however will remain as always on providing great service and delicious fresh food to our clients using as many locally sourced ingredients as possible."

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