The new company will be headed up by HCM’s CEO, Bill Toner, who will now be Group CEO, with CH&Co’s Co-Founders, Robyn and Tim Jones, continuing in their previous roles as Founder and Chairman respectively.

MML identified there was a shared growth ambition and similar corporate cultures in both organisations but that in order to compete more effectively with the largest players in the £4.25bn contract catering sector, they needed greater scale and investment capacity. MML is investing £17m for a significant minority stake, with the founders of both companies and their senior management teams also contributing significant funding. Senior debt is being provided by HSBC and RBS.

Ian Wallis, a Managing Partner in MML’s UK investment team, explained,

“This deal has enabled the founders of both companies to release a meaningful portion of the value generated to date, whilst still remaining as key shareholders in the merged business.

Richard Mayers, MML Investment Director, added,

“The MML investment ensures that the business is well funded to capture the market opportunities available and will fund future growth.” Ian Wallis and Richard Mayers have both joined the CH&Co Group board as non-executive directors and will provide counsel on growth strategy.

CH&Co Group’s CEO, Bill Toner, added,

“Contract catering is an increasingly competitive industry where consolidation is the perfect answer for mid-sized independents ready to take on the largest competitors. This merger between CH&Co and HCM Group enables both companies to combine their assets and talent and have the financial strength to compete even more vigorously. We are so much stronger together and within our new Group, we have a range of well established, high calibre brands including, for example, Ampersand, Charlton House, Lusso, and Chester Boyd within CH&Co, and Host, Catermasters and Couture in HCM Group. We cover the spectrum from consumer and fully commercial catering operations to fixed cost catering for some of the UK’s leading brands and organisations across the business, charity, leisure, education and healthcare sectors. Combined, we have an even stronger management team with the credentials to expertly manage business for clients in all these sectors and we now have the scale to successfully mobilise the largest group contracts and provide a real alternative to the big companies.”

Both CH&Co and HCM have enjoyed significant success in recent months with a combined £42.8m achieved in new sales and retention since January this year, including £19.6m in new deals and £23.2m in retained contracts.

There has been speculation for well over a decade about when CH&Co would be acquired but the company has never sought that route, although it has itself acquired several businesses over the years.

Tim Jones, Chairman, explained

“We’re starting to see more consolidation in our industry, some of which is through new entrants to our market, and we want to be leading this because there are only so many opportunities to build on this scale. Between our two companies, we have an excellent track record of long standing client relationships and we are now represented across a wider range of hospitality sub-sectors than either company was before, which also gives us the operational scale on a national basis to compete even more effectively. Both organisations have excellent client retention records and we have a very experienced management team across our new company with in-depth experience of mergers and acquisitions, and post-deal integration. We’re very confident that this merger will go smoothly and both companies will become even stronger as one entity.”