The Dollars & Sense Behind Accent's Acquisition Streak

Posted On: 12/11/2017

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Which vending company will Accent Food Services scoop up next? What geographic area is next on its radar? What's its master plan? The fast-growing multistate vending powerhouse has the industry abuzz with speculation following its acquisition of 14 vending companies this year alone, and its expansion into territories that are far from contiguous with its Pflugerville, TX, home base. What's more: officials say they remain hot on the acquisition trail.

To put Accent's size in perspective, it currently operates 25,000 vending machines and 800 micromarkets across 175 routes and has some 700 employees.

Through its flurry of acquisitions, Accent has expanded outside the Lone Star state into Reno, NV, which is developing a tech conglomerate, the greater Washington, DC, area and, most recently, Phoenix, AZ. To support its entry into and anticipated growth in these first regions outside of Texas, Accent established distinct Mid-Atlantic, High Sierra and West divisions.

Supercharging Accent's fast-track growth and its stature as an industry leader is Coca-Cola veteran Josh Rosenberg, who stepped into the role of president and chief executive in 2015, along with an infusion of capital over the past decade from two private-equity investor partners. A growing team of experts in key facets of the operation, from both inside and outside the industry, also helps set the bar high and lay a strong foundation as Accent sets its sights on continued expansion.

"We have a vision to become the number one provider of convenience services in the away-from-home segment," emphasized Rosenberg. "We're very focused and selective about targeting companies that align with that strategic vision. Operators invested in technology, in high-growth geographies, with strong customer lists and innovative management teams make the acquisition case even more compelling."

Building Blocks

Like most vending companies, Accent comes from humble beginnings. Tom and Rhonda Hawkins started it in 1988 in Austin, TX, operating a single route out of their garage. As their vending business grew, they joined forces in 1994 with another small operator, Marty Blank, to expand their respective services and customer bases.

Within a decade, Accent expanded its service radius into the east Texas Bryan/College Station and Nacogdoches markets by acquiring Coca Cola's full-line vending business in the region, and south into San Antonio as a greenfield startup.

A major turning point for Accent came in 2008 when it partnered with Chicago-based private-equity firm Silver Oak Services Partners, a move that enabled the company to invest swiftly and broadly in technology and acquisitions and build a platform on which to support its anticipated growth.

Another key piece of the growth equation that Silver Oak brought to the table was the decision to hire Tim Newman as chief financial officer shortly after their partnership with Accent was consummated. With a background in running the finance operations for acquisitive private-equity portfolio companies, Tim Newman brought a level of professionalism and experience to the management team that facilitated the company's rapid growth in the following years.

Between 2008 and 2015, the company made 12 acquisitions, driving its expansion across Texas, including operations in Dallas and Houston, in 2010 and 2012, respectively.

In 2011, Accent invested in the cutting edge of technology by deploying Cantaloupe's remote monitoring and cashless payment technology throughout its operation to maximize sales, streamline operations and boost the consumer experience.

"This technology enables our operations team to get real-time data from 100% of our machines," Rosenberg pointed out. "We use this data to drive our just-in-time distribution, ensure on-time full product fulfillment, and manage technical service issues before most customers know they ever occurred."

It was also in 2011 that Accent made a pioneering leap as an early adopter of micromarkets.

Rosenberg joined Accent as vice-president of sales in 2013. Prior to Accent, he spent 18 years at Coca-Cola Refreshments, where he ultimately led the bottler's vending business as vice-president of national vending sales. An industry figurehead, he also serves as the National Automatic Merchandising Association's secretary and treasurer and was honored by NAMA as its 2016 Industry Person of the Year. Rosenberg was also recognized among the 2017 Top 40 Entrepreneurs in America by KPGM QuantumShift.

When Rosenberg took the reins as Accent president and chief executive in 2015, founder Tom Hawkins took on the role of chairman, stepping back from day-to-day operations.

Equity Infusion

At the same time, Accent's leaders decided to seek a new investment partner. Audax Private Equity, a Boston-based private equity investment firm, together with Accent's management team, acquired the business from Silver Oak Services Partners and the Hawkins in November 2016.

"That was a transformational pivot point," said Rich Gottbrath, who joined Accent as director of strategic development and planning in March. "The partnership with Audax opened the floodgates, giving the company the capital and resources to transform into a multistate operation."

Gottbrath leads Accent's merger and acquisition efforts and plays a lead role in its overall growth strategy. Prior to joining Accent, he was on the mergers and acquisitions team at Lincoln International, the Chicago-based investment banking advisory firm that led the sale of Accent to Audax.

"When I was an outsider trying to market this business to investors, there was nothing sexy about vending, but Accent demonstrated that it's not your grandpa's vending industry anymore," Gottbrath recalled. "The services we provide are on the forefront of how many companies attract the best talent in today's competitive workplace. If you ask a Google executive how to retain employees, a big part of the answer is improvement of the employee experience through convenience services. This is even more true with millennials. Human resources managers are focused on employee retention by providing what we can deliver. It's a great time to be in this industry."

He emphasized that micromarkets and "concierge solutions," from delivery of fresh fruit, salads and sandwiches and catered meals, to specialty beverages, sparkling water and cold brew coffee, are game changers that are setting Accent apart from its competition.

"Josh has a bold vision to be the No. 1 provider of convenience services in the markets where we operate, and that's not only through acquisitions but also organic growth," Gottbrath said. "We're up to the task by investing in the management team, technology, processes and facilities required to operate at the scale and caliber we have achieved and continue to build upon."


When Accent sets its sights on acquiring a vending company, a key consideration is that the company has an innovative management team in place that can contribute to Accent's own processes, use of technology and growth paths for its employees, Gottbrath explained.

Within the past nine months, Accent has added several new executive posts including chief operations officer, vice-president of human resources, vice-president of key account management and vice-president of strategic development and planning.

"We've made a huge investment in the future professionalization of our management team," Gottbrath said. "We've brought in high-caliber individuals from within and outside the industry. We have a lot of talent coming together to build our vision of a best-in-class operation. We've also made a large investment in our front-line employees to keep them engaged so they see a career path with Accent going forward. We want them to share the same passion that we as a management team have for the company."

Accent's preferred strategy is to bring the owners of the companies it acquires into its management team and to retain their employees.

"It's hard to find good people, so it's always our goal to keep the ones who have already proven themselves at the high caliber of companies we acquire, but of course there's always some natural attrition," Gottbrath said. "With our high-profile acquisitions of Baltimore's Black Tie Services and Arizona's Ace Vending, we retained both management teams. With some smaller companies, owners are ready to exit, but they help facilitate the transition to make sure there isn't a power vacuum when they do."

Accent's expert at smoothing the transitions amid the company's steady stream of acquisitions is Accent director of integration Ray Leydecker.

"Ray and I work very closely together to make the acquisitions a success," Gottbrath explained. "I bring the deal in and get it done, then he leads the integration efforts, whether the former owner is staying in place or not. He helps transition owner/operators to our larger strategic platform. It can be a difficult step for a longtime owner of a company to become part of something bigger, but we find that most of the time, they are excited to have the growth capital, know-how and technology to supercharge what they've built."


Accent is also heavily focused on streamlining and adapting its processes to most effectively support its rapid growth from a single-state operator only two years ago to its current operations in 10 states and Washington, DC.

"When you grow that fast, you need processes to keep up with the growth," Gottbrath emphasized. "We continue to bring in the right subject matter experts from within the industry or consultants from outside our industry to increase efficiency and have the right product in the right place at the right time. Part of the focus is also on engaging our employees and not burdening them with our growth.  Effective change management is critical to the long-term success of all the work we are doing."

With 175 routes, Accent is also ensuring that in building its processes, it's systematically making sound environmental decisions, including decreasing emissions and fleet usage.


Investing to remain on the forefront of technology, just as it did as an early player with telemetry and micromarkets in 2011, is an essential component of Accent's growth plan.

"We had 250 micromarkets in 2015 and we have 800 plus today," Rosenberg said.

"We continue to invest our time and resources in the newest and best technology available in the industry."

That includes continuing to innovate with the latest in cashless, mobile and biometric payment applications, along with rewards and loyalty programs.

In addition to using Cantaloupe's route-management system and remote monitoring technology to optimize its routes for efficient fleet usage, Accent has GPS on all of its trucks to monitor usage and help reduce drivers' time on the road.

Gottbrath added that telemetry, micromarkets and GPS technology enable access to enormous volumes of sales data, but this information is only as valuable as the operator allows it to be.

"It's important to distill data in a useful way so the management team can drive results based on the information," Gottbrath pointed out. "So many data points come into play with 25,000 vending machines and 800 micromarkets. There's transactional data and trend data to help compare and customize planograms at the machine level and to guide prekitting and dynamic routing. But you can't expect it to just solve all your problems. The more data you have, the more empowering it becomes – but you risk getting overwhelmed if you don't harness it. Our work moving ahead in that regard will be on the forefront of the industry."


Beyond the sizable investments it's made acquiring other companies and their facilities, Accent broke ground in June on a new 65,000-square foot office, warehouse and distribution center in Pfugerville, TX, that it will move into this spring.

A fresh food commissary, central Texas operations and training development center will also be housed at the new headquarters. Rosenberg said the company expects the new facility to host more than 150 employees.

Additionally, Accent recently moved into a new facility in Dallas that replaced two previous sites, in Garland and Haltom City, to better serve the entire Dallas-Ft. Worth Metroplex. The new building includes an onsite commissary, run by an outside partner, which did not exist in the previous facilities.

Gottbrath pointed out that the facilities it gained with its purchases of Black Tie Services and Ace Vending, its two largest acquisitions to date, serve as a model for Accent in many ways.

"We made an investment in the infrastructure of what they built out and we're learning their way of doing things in the warehouse," he said. "We buy best-in-class operators for a reason, and don't just ask them to do things our way. We do a detailed assessment with each company we acquire and, from many, we learn and try to push out what they do, while with others, we may have a better way."

Accent also retained the Black Tie and Ace Vending names, since both have long-established recognition and goodwill in their respective markets.

"We've kept the original operators with their feet on the ground in these markets," Gottbrath explained. "As Accent has diversified its geographies, we've also pushed some of our management to the field. We look at it as a partnership to do our best together moving forward, with the top-rate operators who join us helping bring their know-how to the entire national platform."

Black Tie continues to operate out of the company's original facility with its existing management team. The same is true with Accent's recent acquisition of Ace Vending to form the company's new West division, based in the Gilbert, AZ, facility where Ace Vending was headquartered.

"We want to be decentralized and close to home in each market we serve in terms of people, execution and customer focus, but centralized where it makes sense and there's scale through shared services like HR," Rosenberg emphasized. "We are focused on retaining the agility to roll with the punches in day-to-day operations to meet customers' needs even though we are a multi-state conglomerate; we have a firm focus on not losing that personal touch that makes us special."

Right Place At The Right Time

Rosenberg said providing coffee and breakroom pantry solutions paid for by the employer to woo a demanding generation of young employees presents an unprecedented opportunity for the industry and is a major area of focus for Accent.

"We bring excitement into the breakroom, especially in millennial and tech-heavy markets," the Accent chief said. "We're putting a stake in the ground as a provider of pantry provisions. We want to see that business triple in size in the next three years."

He emphasized that what was once considered office coffee service has changed dramatically to the industry's favor as employers see the value in a breakroom that rivals the local coffeehouse to keep employees onsite.

"It's no longer about just providing an average cup of coffee. Starbucks today procures more milk than coffee and employees want those specialty drinks in the workplace," Rosenberg continued. "Employees are driving the change to a concierge service. They're much more educated than they were. We're sourcing product we never thought of like sparkling water and tea and kombucha and cold brew coffee."

Demand for fresh, high-quality food, offered as a free perk by employers and through micromarkets is also exploding. Accent has met the burgeoning demand by partnering with local suppliers that curate and produce its food at on-site commissaries.

"Fresh food menu variety and quality is critical to our success and outsourcing it to a third party who specializes in that is our preferred route," Gottbrath said.

"With new demands for fresh food and beverages, delivery mechanisms are catching up and the most exciting opportunity beyond vending to accommodate nontraditional product lines is micromarkets," Rosenberg said. "We have to change the way we operate to bring new products to the workplace and invest accordingly. Sourcing has to be more advanced and we have a larger, more diverse fleet with refrigerated storage on our vehicles. We're constantly adapting to stay on the cutting edge."

GROUNDBREAKING: Accent broke in June on a new 65,000-sq.ft. office, warehouse and distribution center in Pflugerville, TX, that it will move into this spring. A fresh food commissary, central Texas operations and training development center will also be based at the new headquarters.