Trusthouse Merges With Valley Services in Major Contractor Deal

TrustHouse Services Group has merged with Valley Services, Inc., the third transaction closed by TrustHouse in the last twelve months following the purchase of A’viands, LLC in July 2011 and Lindley Food Service this past April. Valley Services is headquartered in Jackson, MS, and has been in business for 52 years providing food services in 20 states.

Like TrustHouse, its revenues are principally derived from the healthcare and education segments, and it is also a market leader in senior nutrition sector, providing home and congregate nutrition services to the elderly. Trusthouse says the combined company will rank as the sixth largest food services provider in the United States and the fourth largest in the Healthcare and Education sectors following the merger.

“This is a very significant transaction for our Company," says Trusthouse Chairman/CEO Michael Bailey. "TrustHouse will now have annual revenues approaching $500 million and trade in 44 states.  Valley Services is a great business run by a very successful and talented team which I am delighted to say will remain with the business and become significant shareholders in the combined company. Valley’s presence in the Senior Nutrition sector, together with our Lindley Food Services business, makes us the clear market leader in the United States in that attractive and growing sector. One in five Americans will reach the age of 65 by 2020, resulting in over 70 million seniors.”

Going forward, Valley Services will continue to operate as a stand-alone division managed by CEO Jim Walt and his team, according to a company release.

“We are very excited about the prospects for the combined business," Walt says. "Through greater access to capital and additional resources resulting from the merger, we believe Valley Services and TrustHouse will achieve faster growth. Our combined strength will create greater opportunities for all our clients, employees and stakeholders.”

“The transaction is very strategic for TrustHouse in that it deepens the company’s already strong presence in the attractive Healthcare and Education end-markets," comments Keith Stimson, partner in San Francisco based middle market private equity firm Gryphon Investors, of which Trusthouse is a portfolio company. "Valley also provides a significant presence in the southern U.S. and will enable TrustHouse to more fully address the growing demand in the Senior Nutrition market. We are delighted to have Jim Walt and his talented management team become part of the business.”

The transaction was brokered by McColl Partners, and Legacy Capital and Parker Poe Adams & Bernstein acted as legal counsel to TrustHouse. Terms of the transaction were not disclosed.