Palm Beach Capital expands convenience store distribution platform amid pandemic-spurred demand

National Convenience Distributor, which delivers to stores in 11 states, plans to expand in the contiguous Northeast region.

As food and manufacturing businesses see increased demand amid the coronavirus crisis, Palm Beach Capital’s newly formed National Convenience Distributor remains in acquisition mode as it seeks to reach a $4 billion revenue goal.

The West Palm Beach, Florida, firm on Monday snapped up Allen Brothers Wholesale Distributor, a convenience store supplier that recorded $264 million in sales last year, managing partner Michael Schmickle said, referencing a December trade publication report encompassing industry sales figures.

Building out its Northeast presence, the PE firm merged Allen Brothers with its two existing distributors – HLA and J. Polep – under a new brand called National Convenience Distributor. Combined annual revenue of the three business units exceeded $3 billion last year.

“[The purchase] gets the [company] closer to the $4 billion goal it hopes to achieve in the next two years,” Schmickle told PE Hub.

Palm Beach Capital signed a letter of intent in January and closed the directly sourced deal last Friday, he said. Covid-19 did not impact the Allen Brothers transaction, according to Schmickle.

Allen Brothers will increase the purchasing power, as well as optimize transportation routes for the National Convenience Distributor platform. The wholesale distributor adds Maryland and Delaware to the list of states served, making NCD one of the largest full-line convenience store distributors servicing the Northeast.

NCD, which distributes to stores in 11 states through its group of brands, plans to expand in the Northeast – specifically the mid-Atlantic region as well as parts of the Midwest, Schmickle said. “We are in continual discussions with multiple parties,” said Schmickle, clarifying that the virus outbreak did not hamper any potential acquisition conversations.

Amid the pandemic, the distributor reported increased volumes in many delivery areas, but also saw a slight fall-off in other areas. For example, those serving inner-city convenience stores have started to see a decline due to quarantines, he said.

Palm Beach Capital was formed in 2001. It was raising its fourth fund targeting $150 million in 2016.

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