Marriott Corp. announced yesterday that it is continuing to expand its food-service business by agreeing to buy Service Systems Corp., a subsidiary of R. J. Reynolds Industries.
The deal -- at an undisclosed price -- is Marriott's second food-service acquisition this year. Earlier this month, the Bethesda-based food and lodging company with $3 billion in 1983 sales acquired Gladieux Operations, a food-service firm with $100 million in yearly sales.
Service Systems Corp., which is based in Buffalo, N.Y., has $320 million in yearly sales and serves 1,500 locations in 33 states. It is a subsidiary of Del Monte Corp., which in turn is a subsidiary of R. J. Reynolds.
As a result of the two acquisitions, Marriott's food-service operations -- which traditionally have been focused on the East Coast -- now have nationwide exposure, dishing out meals for businesses, schools, colleges, health-care facilities, retirement communities and recreational facilities all across the country.
"This gives them instant national capacity in food-service management," said Joseph J. Doyle, a financial analyst with Smith Barney, Harris Upham & Co. "I view this as a very positive development," he said.
Marriott's revenues should increase by almost 50 percent in the food-service segment. That segment accounted for $951 million, or 32 percent, of Marriott's 1983 sales.
The acquisition will "substantially increase the size of our institutional feeding operations and underscores our continuing commitment to the growth of our food-service businesses," said President J. W. Marriott Jr.
The increased commitment to the food-service industry comes just as Marriott is leaving the restaurant business. Last fall, the company sold its Casa Maria Mexican Restaurants to El Torito Restaurants Inc. Later this year, the company is expected to complete its sale of 29 other restaurants, including Hogate's, the Barley Mow, Charley's Place and Phineas, to W. R. Grace & Co.
In selling these restaurants, Marriott said it preferred to focus on its lodging operations, its food-service activities and its fast-food operations under the Roy Rogers, Bob's Big Boy and Hot Shoppes chains.