Advantage Solutions, a leading provider of sales and marketing services to consumer goods manufacturers and retailers, said Wednesday it is selling its collection of foodservice businesses, including Waypoint, to Prospect Hill Growth Partners L.P.
The company said the sale will streamline its portfolio, allowing it to focus on its core retail businesses and strengthen its balance sheet.
Advantage also said Wednesday it has entered into two separate agreements with third-party technology companies to optimize back-office costs and effectiveness.
As part of the sale to Prospect Hill, Advantage’s foodservice businesses, including Waypoint, Marlin Connections, Primeline, CSSI, Ettros, Halverson Group and Coleman and Greear & Associates, will combine with KeyImpact Sales & Systems to form Acxion Foodservice. Advantage will receive total proceeds of approximately $100 million, a combination of mostly cash and an ongoing 7.5% stake in the combined entity. In addition, Advantage will obtain a seat on Acxion’s board of directors.
“While we continue to see growth potential in the foodservice category, we believe our clients are best served when we focus on our core retail capabilities while partnering to compete in adjacent segments,” said Advantage CEO Dave Peacock. “This deal allows Advantage to further prioritize other growth efforts in a more focused way. We are excited to partner with Acxion on an ongoing basis, and we look forward to sharing in the company’s success going forward.”
Advantage plans to use the majority of the proceeds of the deal to pay down debt, a move the company said will further strengthen its balance sheet and allow for strategic investments in its core businesses.
“Simplifying our business sharpens our focus on how we convert shoppers into buyers for both our consumer-packaged goods and retailer customers,” Peacock said. “The strategic decisions we’re making at Advantage are designed to improve how we serve our clients and customers, while helping us improve cash flow and position the company for profitable growth.”
Optimizing business functions
The sale is Advantage’s latest business initiative focused on its broader plan to accelerate growth. The company is also taking steps to optimize and improve a host of business process and administrative functions.
Under a new agreement, Advantage will team with Genpact, a global leader in business and technology services, to create an innovative go-to-market model leveraging the strengths of Advantage’s client management capabilities and connectivity within the consumer goods and retail industries and Genpact’s advanced, AI-powered technology, process orientation and automation to deliver certain back-office services more efficiently and on a much larger scale.
Through a separate deal with Tata Consultancy Services (TCS), Advantage is modernizing its IT services in a move designed to significantly improve the availability and speed of its IT support services and the management of hardware. As part of the agreement, TCS will transform Advantage’s IT services, including its help desk, device provisioning, infrastructure and applications.
“Both initiatives will make Advantage stronger, more nimble, more competitive and better enable us to drive our clients’ and our customers’ businesses,” Peacock said. “Importantly, these strategic decisions are designed to help us improve our financial discipline and position Advantage for profitable growth.”
Terms of the agreements with Genpact and TCS were not disclosed.
The latest moves follow a series of deals completed by Advantage in late 2023 intended to improve cash flow, improve margins, reduce debt and fuel profitability. Those include the sale of Atlas Technology Group to Crisp, which occurred in October, and the company’s December announcement to streamline and restructure its international businesses, most notably reducing its stake in Advantage Smollan Limited, a joint venture with the Smollan Group operating in Europe.
“Part of accelerating our growth and simplifying our business involves evaluating how we work and where we deploy our resources,” Peacock said. “As we examine the best way to support our core business, we’ll look at all areas of our organization to ensure they fit within our overall strategy.”