One of Levy's latest deals is a 20-year, $800 million contract with the NASCAR auto racing circuit.
Compass Group has announced that it will purchase the 51 percent of Levy Restaurants that it does not currently own, giving it controlling interest in the Chicago-based restaurant management and upscale foodservice firm. Compass and Levy originally signed a strategic partnership agreement in September 2000 that gave Compass a minority interest in Levy.
Since then, Levy has more than doubled in size. It now has more than $600 million in annual revenues. It did this largely by capitalizing on the rapidly growing market for upscale foodservice in the sports and entertainment segment. In those segments, luxury suites, skyboxes and premium concessions have become standard—even college and minor league venues (one recent deal is a 20-year, $800 million contract with NASCAR, an entity not traditionally associated with Levy's white tablecloth pedigree).
Today, Levy has contracts with 73 sports and entertainment facilities and derives a reported 85 percent of its annual revenues from this business. The remainder comes from operating 22 commercial restaurant properties, including such high-end venues as Chicago's Spiaggia.
Both parties emphasize that the recent acquisition was not part of the original agreement. In an August 2001 interview with FM, Levy President/CEO Larry Levy noted that his then-year-old deal with Compass did not include a provision for buying out the rest of the company, "although I suppose that could happen," he added.