Navigation Capital Recaps Five Star Food Service

Navigation Capital Partners has sponsored a recapitalization of portfolio company Five Star Food Service, a Chattanooga, Tenn.-based provider of vending, coffee and food services. The deal increases Navigation’s majority stake, although no financial terms were disclosed.

PRESS RELEASE
Navigation Capital Partners (NCP), an Atlanta-based middle market private equity firm, announced that it has completed the strategic realignment and financial recapitalization of one of its portfolio companies, Chattanooga, Tenn.-based Five Star Food Service (Five Star), a full-line vending, coffee service and food service provider. Aurora Management Partners assisted Five Star management and NCP with the strategic realignment while NCP initiated and structured the financial recapitalization. Reed Smith and Kilpatrick Stockton served as legal counsel for NCP and Five Star, respectively.

The financial recapitalization increases NCP’s majority ownership stake in Five Star and will enable the company to execute its future strategic operating and financial plan. NCP appointed Alan Recher as chief executive officer of Five Star, and appointed NCP Operating Partner Craig Kirsch to the Five Star board of directors, where he joins NCP partners Larry Mock and Mark Downs. Cowen Capital Partners’ Managing Director Sengal Selassie continues to serve on the board, as well.

Founded in 1993, Five Star is one of the largest full-line vending and food services providers in the Southeast, with a staff of more than 600 servicing 168 routes, 80 cafeterias and numerous support functions operating from a network of nine branches and two culinary centers. “We’re thrilled to have the active support of NCP and benefit greatly from their partnership and involvement, said Recher, CEO of Five Star. “The transactions strengthen our balance sheet and position us for attractive future growth.”

As part of the strategic realignment, Five Star became a franchisee of Canteen Vending Services (Canteen), an operating company of Charlotte-based Compass Group North America. Five Star will primarily operate in the Knoxville, Nashville and Chattanooga, Tenn. markets, while also serving other select customer/market areas in the Southeast. As one of the largest franchisees of Canteen, Five Star joins a national network of recognized vending companies and gains access to Canteen’s brands and technology. Canteen is the largest national vending company, and operates more than 18,500 client sites.

“We are confident the realigned and recapitalized business, assisted by the opportunity to join the Canteen franchisee family, will bolster Five Star’s growth and profitability in the marketplace,” said Mark Downs, NCP partner and lead on the investment. “We look forward to continuing a close collaboration with Canteen and Five Star’s management team as we work together to expand the business.”

About Navigation Capital Partners

Navigation Capital Partners (NCP) is an Atlanta-based private equity firm that makes growth and buyout investments in middle market niche manufacturing, distribution and business services companies across the United States. The managers of NCP formerly founded and managed Mellon Ventures, the private equity investment partnership of Mellon Financial Corporation. With the backing of Goldman Sachs Vintage Funds, NCP acquired the private equity portfolio of Mellon Ventures in December 2006. NCP currently manages approximately $375 million of invested and committed capital. For more information, visitwww.navigationcapital.com.

About Five Star Food Service

Five Star Food Service is a full line vending, food service and office coffee company with headquarters in Chattanooga, Tenn. For more information, visit www.fivestar-food.com.

About Canteen Vending Services

Canteen Vending Services is an operating company of Charlotte-based Compass Group North America, the leading foodservice and support services company with $9 billion in revenues in 2008. With 388,000 associates worldwide, its parent company, UK-based Compass Group PLC had revenues of ₤11 billion in the year to September 30, 2008. For more information, visitwww.canteen.com.