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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported): April 26, 1994
Commission File Number: 1-9364
FLAGSTAR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3027522
(State of other jurisdiction (I. R. S. Employer
of incorporation or organization) Identification No.)
203 East Main Street 29319-9966
Spartanburg, South Carolina (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code:
(803) 597-8700
N/A
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On April 27, 1994, Flagstar Companies, Inc. ("FCI"), the corporate parent of
Flagstar Corporation (the "Company"), announced that, as of April 26, 1994,
the Company entered into a Stock Purchase Agreement with Compass Group PLC, a
public limited company incorporated in England and Wales, for the sale of the
Company's Food and Vending operation. For additional information concerning
such proposed sale, reference is made to FCI's press release, a copy of which
is attached hereto as Exhibit 99.
Item 7. Financial Statements and Exhibits.
Exhibit No. Description
99 Press Release of FCI dated
April 27, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
FLAGSTAR CORPORATION
Date: April 28, 1994 /s/ A. Ray Biggs
A. Ray Biggs,
Senior Vice President and
Chief Financial Officer
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EXHIBIT 99
Media Contact: Flagstar Companies, Inc.
Coleman Sullivan
803-597-8642
Karen Randall
803-597-8440
Compass Group (London)
Francis Mackay
011-44-81-741-8900
Nick Lyon
011-44-71-796-4133
Investor Contact: Flagstar Companies, Inc.
Larry Gosnell
803-597-8658
FOR IMMEDIATE RELEASE
NOTE TO EDITOR:
The following news release was issued in London earlier this
morning:
COMPASS GROUP PLC ANNOUNCES ACQUISITION OF CANTEEN CORPORATION
SPARTANBURG, S.C., Apr. 27 -- Compass Group PLC today
announced that it was further strengthening its catering business
with the acquisition of the Canteen food and vending operations
from Flagstar Companies, Inc., for a total consideration of $450
million.
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Francis Mackay, chief executive Compass Group, in announcing
the acquisition, said, "Our aim is to encourage and support the
best food service businesses in the world, which is why we are
delighted to announce this agreement between Compass Group and
Flagstar. We believe that this is the right move for Canteen, its
employees and its clients."
Canteen, part of Flagstar, provides food service and vending
for a wide range of clients -- from major business and industry
locations to hospitals, retirement centers and correctional
institutions. Canteen employs over 20,000 people to serve over
12,000 accounts, a $1 billion business.
"We have made a strategic decision to concentrate on our core
restaurant businesses," said Jerome J. Richardson, chairman and
chief executive officer of Flagstar. "The sale of our Canteen food
and vending business will enable us to begin to reduce debt and
focus our growth capital on our Denny's, Hardee's, Quincy's and El
Pollo Loco brands."
Not included in the sale are Canteen's Volume Services and TW
Recreational Services businesses.
Francis Mackay added, "As part of our agreement with Flagstar,
we are also pleased to confirm that we will be strengthening our
portfolio of high quality food service brands. Not only will we be
able to offer our exclusive 'owned' brands such as Dixie's Donuts
to the American markets, but we will be exclusively able to
develop, for a franchise fee, the Denny's and Quincy's brands in
our European food service market sectors."
"Flagstar has built excellent restaurant brands which are an
'ideal fit' with our existing portfolio. This will enable us to
widen our offer to current clients and open up new opportunities in
our existing catering markets," he said.
Flagstar noted that the intent to find the right buyer for its
food service and vending businesses had been an important issue.
"With a strong track record in the food service business, Compass
Group is in an excellent position to build Canteen's business in
the United States," Richardson said. "We are also looking forward
to a continuing relationship with Compass Group for the franchising
of our restaurant brands in their food service locations in the
United States and Europe."
In making the announcement, both companies were keen to
emphasize the value they placed on being able to confirm that it
was "business as usual."
"All of the Canteen senior management are joining us. In
particular, I am pleased to welcome Joe Aprile, president, food
service and vending, Canteen Corporation, and his immediate team.
Joe will be reporting to Mike Bailey, who is appointed chief
executive, United States catering operations for the Group," said
Francis Mackay.
Compass Group and Flagstar anticipate that the transaction
will be completed by mid-June 1994.
# # #
4/27/94
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NOTES TO THE EDITOR
1. COMPASS GROUP PLC has a stated mission to achieve leadership
in its chosen specialist markets. In the United Kingdom, its
operating companies include: Compass Catering, the leading
contract catering company with over 3,000 locations providing
catering in the workplace; Roux Fine Dining, the prestige
executive dining specialist; Letheby & Christopher, the
premier sport and events caterer in the U.K.; Travellers Fare,
the largest catering company providing catering on travel
locations, including British Rail stations; as well as
Chartwells (education), Bateman Catering (healthcare catering)
and Compass' Commercial Services (in-store/leisure). Client
companies include leading United Kingdom corporations, major
public schools, NHS and private hospitals and major
sports/events locations.
In Mainland Europe, Compass Group's business is mainly through
its subsidiary, Scandinavian Service Partner (SSP). SSP is
the largest operator of airport restaurants in Europe and the
largest contract caterer in Scandinavia. The subsidiary
operates in 10 countries - mainly in Europe but also include
Saudi Arabia.
2. CANTEEN is one of the largest food service management
companies in the United States, with total revenues of $1.1
billion in 1993 for food and vending, which operates in 48
states, Washington, D.C. and Japan.
Canteen provides on-site food service and beverage vending at
industrial plants, offices, major financial institutions and
government installations, as well as hospitals, retirement
centers, correctional facilities and educational institutions.
Canteen serves approximately 1,600 food service accounts and
11,400 vending accounts.
Not included in the sale are Canteen's Volume Services and TW
Recreational Services businesses.
3. FLAGSTAR COMPANIES, INC. (NASDAQ - National Market System:
FLST) is the third largest food service company in the United
States. The company had 1993 revenues of $4 billion.
Flagstar employs approximately 100,000 people systemwide.
On November 16, 1992, the company completed a recapitalization
plan which included a $300 million equity investment by
Kohlberg Kravis Roberts & Co. (KKR). The KKR partnerships
acquired approximately 47 percent ownership of Flagstar.
Concentrated in the Western and Southeastern U.S., Flagstar's
restaurant operations include several of the nation's leading
family and quick-service restaurant chains.
4. DENNY'S is the largest full-service family restaurant chain in
the United States based on the number of units and systemwide
sales. Denny's restaurants offer a comfortable dining
atmosphere and moderately priced food, including breakfast
fare, steaks, seafood, hamburgers, chicken and sandwiches,
with both counter and table service at all meals. Denny's is
well-known for its Grand Slam menu, 24-hour service and
around-the-clock breakfast.
5. QUINCY'S FAMILY STEAKHOUSE is a leading family steakhouse
chain in the Southeast, with 213 Quincy's restaurants in 10
states at year-end 1993. The restaurants offer limited-table-
service dining at moderate prices with steak, chicken and
seafood entrees as well as freshly-baked yeast rolls and a
buffet-style food bar called the Country Sideboard. Quincy's
is the only chain in its segment with a breakfast program,
offering customers a weekend breakfast bar in all locations.
It has recently introduced an all-buffet restaurant concept,
Quincy's Buffet, in Columbia, S.C.
6. COMPASS GROUP PEOPLE: Compass Group employs approximately
25,000 people in Europe and will employ a further 20,000
people in the U.S.
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