by Maureen Flanagan
Automatic Bar Controls, Inc. (ABC) is the dominant manufacturer of hand-held beverage dispensers for restaurants, bars, and taverns. The company's core product, Wunder-Bar, is the dispenser of choice for the world's premier beverage companies and national distributors. The company has also begun to expand into new markets, creating dispensing, cooling and mixing systems for food and beverage products that range from condiments and sauces to liquor, beer, and specialty drinks. Now under new ownership, the Vacaville, CA-based company is ready to further its market growth.
In a July 19, 2002 buyout, ABC was purchased by American Capital Strategies, Ltd. (Nasdaq: ACAS), which funded the purchase with senior notes, subordinated debt and common stock. ABC had previously been owned by TCW Capital, an affiliate of Trust Company of the West.
"Under new ownership, ABC is ready to expand its sales of new and innovative products that offer added efficiency and convenience for a wide variety of food and beverage purveyors," said Richard A. Martindale, the company's president and CEO.
Martindale and his father founded the company in 1971, focusing the business on liquor dispensing products. A decade later the company introduced the Wunder-Bar hand-held, hydraulic mechanical soft drink and juice dispensing gun. These familiar flexible hose bar guns dispense ingredients that are mixed in the nozzle (post-mix) or after they have been mixed in a tank (pre-mix). They are the standard for dispensing carbonated and non-carbonated beverages and offer consistent and accurate mixtures of syrup and carbonated water, better carbonation and trouble-free operation.
ABC also manufactures dispensing systems for condiments and for food products such as pizza sauce, oil and nacho cheese. These products have opened the doors to new customers including quick-service restaurants, pizza chains, and athletic venues.
The company also makes automatic filling systems to facilitate bar and restaurant operators dispense mixed and specialty drinks. In the last few years, ABC's new product introductions have included a portion-controlling liquor dispensing system that tracks and computerizes liquor use, called the "Cyclone", and a state-of-the-art beer dispensing system with unique cooling attributes and performance characteristics, called "Beer Boss".
Continuing to expand its product line, ABC introduces innovative product designs and features to make bar and restaurant operations more efficient, tidy and cost-effective. The resulting products -- such as an improved flexible-hose dispenser for spraying pizza oil and upgrades for a system to blend and chill root beer - have begun to make inroads into quick-service and pizza chains. ABC has also been working with top food companies and major convenience stores to offer new and enhanced condiment, coffee and tea dispenser systems.
Throughout its history, ABC has aggressively pursued opportunities to expand its markets. In 1987, it established a joint venture in Britain with Peak Drink Dispense, Ltd. In 2000, ABC acquired a metal production facility to fabricate its stainless steel products. The acquisition has enabled ABC to manufacture its Beer Boss systems in-house as well as control quality, reduce costs and pursue significant opportunities for new business.
"One of ABC's strengths is its long-standing relationships with the world's premier beverage companies," said Roland Cline, American Capital Principal and Managing Director. "Strong customer relationships are critical for market penetration because beverage providers typically supply drink dispensers to restaurant and bar operators free of charge to secure their exclusive syrup business."
ABC joins American Capital's portfolio of more than 65 companies, several of them in the foodservice industry.
Click here for more information about American Capital's portfolio.
Alongside American Capital's $35 million investment in ABC, LaSalle National Bank provided a revolving credit facility. Both American Capital and CEO Martindale have an equity investment in the company.
ABC operates in the $1.3 billion serving equipment sector of the highly fragmented foodservice and supplies industry. Since 1998, growth in this sector has averaged 7.4% annually and is expected to continue. More specifically, the company's products are tied to the restaurant and beverage industries which are expected to thrive as the economy grows and baby boomers reach their peak earning years. Analysts expect ABC's primary markets for hand-held beverage dispensers to fare well as will demand for its condiment dispensers. The markets for liquor control and beer dispensing systems, which the company has recently entered, are also expected to show significant gains in the years ahead.
Led by an experienced, motivated management with ownership incentives, Automatic Bar Controls has success on tap for the years ahead.
