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A chain of Italian restaurants centered in the Lewiston/Auburn area has been sold to Teamshares, a New York-based company that assists small businesses as they transition to employee ownership.
Terms were not disclosed.
The goal of Teamshares is to keep the legacy and culture of Sam's Italian Foods intact, John Boyan, a broker relations lead with the firm, told Mainebiz.
The deal is a win for the restaurant chain, said the retiring owner, Richard Michaud, who has worked at Sam's with his wife, Wendy, since 1988.
“It should create continued new opportunities for our team members,” Michaud said. “We liked that.”
Dennis Wheelock of KW Commercial/Magnusson Balfour brokered the deal.
“This was a fast project for a deal this size,” Wheelock said. “We got it done in 60 days, once we got it under contract.”
On average it takes 18 months to sell a business, he noted.
Michaud contacted Wheelock in the spring of 2021 about finding a buyer for the chain. Wheelock marketed it confidentially in generic terms as a food service/restaurant business with multiple locations in Maine.
Boyan responded to the listing in late summer. A deal came together by mid-October and it closed Dec. 1.
Wheelock said, “It ended up being the largest transaction that Magnusson Balfour has done since the agency has been in business.”
Typically, he said, Magnusson Balfour deals with “Main Street” or mom-and-pop businesses with revenues from a few hundred thousand to a few million dollars.
By contrast, he continued, Sam’s Italian — with over a dozen locations — is a larger mid-market business.
“This is my largest deal,” he said.
He added, “Rick and Wendy were adamant about not selling it to just anybody. They had something they were proud of.”
Sam’s Italian Foods was founded in 1939.
“It all began with Sam Bennett, making salami Italians in a small shop located near the intersection of Minot Avenue and Elm Street in Auburn, where the cement foundation can be found today,” according to the website.
The business quickly outgrew the first shop and Bennett moved to downtown Main Street in Lewiston, where it still exists today. In 1946, he opened a bakery. In 1950, he added pizza. A new location in Auburn was added in 1982.
Until recently, there were 14 locations — two in Auburn, five in Lewiston, and one each in Augusta, Brunswick, Dixfield, Freeport, Lisbon Falls, Rumford and Topsham.
Due to staff shortages, the Freeport location closed in 2021, said Michaud. The intention is to try to reopen it by this coming summer.
Michaud started with Sam’s in February 1988, coming in as a shift leader in training. At that time, he recalled, there were about six locations.
He subsequently rose to shift leader, assistant manager, store manager, field manager, then general manager, responsible for supervising the chain.
In 2001, he bought a stake in the chain. He became sole owner in 2003, when the other owners retired. By then, there were nine locations.
Under the Michauds’ ownership, Sam’s continued to grow with the addition of new locations and the purchase of the bakery from the daughter of the chain’s founder, Sam Bennett.
In recent years, the Michauds had begun to plan for retirement. In 2021, the business had a good year, so they decided it was a good time to list it with Wheelock.
Michaud said he and his wife liked the Teamshares model.
“We liked that they represent the ability and the desire to grow the company and take it to its next level,” he said. “We liked that they’re going to bring growth opportunity for team members.
"Restaurants are struggling with staffing across the country. We were no different during this period. But Teamshares has an employee ownership model that’s been very well received and it should be a useful tool to stabilize staffing.”
Michaud said he worked with Boyan on the transition. Boyan is now serving as the company’s new president, effective Feb. 1.
“The other thing we liked is that the company stays whole, so there are no changes to the structure — it still stays Sam’s Italian Foods and moves forward with the new president,” Michaud said.
Most importantly, he said, the company and many of its employees are embedded in their communities.
“We have a lot of long-term folks who have participated in the growth,” he said. “It’s been a very good experience to have the support and the opportunity to work with folks who have been committed for decades to Sam’s. Some of our managers have been there 20 and 30 years.”
Although Michaud will be available as a resource for Boyan if needed, the goal at this point is to enjoy retirement.
“I have a T-shirt from one of my team members that says ‘Retired, under new management, see grandchildren for details,’” he said. “So that’s the plan — spend more time with the grandkids.”
Teamshares is a venture-backed firm founded in 2019.
“Our three founders started the business because they wanted to make employee ownership the future for small business,” said Boyan. “So that’s what we do. We are a mission-oriented company with the goal of helping dozens — and eventually hundreds and thousands — of small businesses to transition to employee ownership. This will put valuable assets into the hands of the employees who work hard to make their companies successful.”
The company works with business brokers to find likely candidates.
“We have a pretty rigorous selection process,” said Boyan. “We look for high-quality companies.”
Criteria include solid revenue, operating histories of over 10 years, a retiring owner, and stable workforces that are able and committed to continue operations after the owner transitions.
The concept took off when the founders, who were working together as financial consultants, decided to leave their jobs and start buying small businesses.
“They wanted to solve for two things,” he said. “They wanted to change that 70% to 80% of small businesses fail to sell. They wanted to find a buying solution for them. And they saw that a lot of employees have been with these businesses for a long time and are potentially the natural successors, but are unable to buy the business themselves. So they created Teamshares to buy the business on behalf of employees.”
The concept is similar to ESOPs, or employee stock ownership programs. “The ESOP structure has been wonderful for many businesses and employees in the U.S.,” he said. “But because of the complexity and cost, ESOPs are most useful for companies that are much bigger. Teamshares has developed a much simpler model of employee ownership.”
He added, “Our goal is for everyone to succeed. We believe that business success should be a win-win for everyone involved, including customers, employees, stockholders, and the larger community.”
To date, Teamshares has partnered with more than 30 companies in a variety of industries across the U.S. Teamshares itself has about 70 employees who work remotely across the nation.
Sam’s is the company’s first acquisition in Maine. Boyan held initial conversations with the Michauds via videoconference, then traveled to Portland to meet them.
Although restaurants have been heavily impacted by the pandemic, Boyan said he’s optimistic about the deal.
“It’s definitely been a hard time for the restaurant industry,” he said. “But we believe that it should come back. People want to go out to eat. We saw Sam’s as a really strong restaurant that was able to perform well through COVID and should hopefully continue to perform well.”
Plans for now are to continue the business as usual.
“The company has been extremely successful since 1939 and we’ll continue that,” said Boyan. “Nothing is changing with the new ownership other than becoming an employee-owned company.”