Arctic Food Equipment makes acquisition

Longtime family-owned business Arctic Food Equipment expanded its portfolio of services with the acquisition of another Springfield-based company.

Arctic Food Equipment closed on a deal April 17 to acquire the assets of Ozarks Food Equipment Sales & Service, which includes its parts department and client list. As a result, Ozarks Food Equipment owners David and Jan Paulsell have retired. Its facility at 630 N. Prince Lane is for sale, said Jason Paulsell, son of the longtime owners. The financial terms of the deal were not disclosed.

As part of the deal, Paulsell, who worked as Ozarks Food’s service and parts manager, has joined Arctic’s 31-person staff as its first-ever parts manager, said Arctic Food Equipment Manager Nathan McCartney.

“It kind of happened really quickly,” McCartney said of the acquisition that came together in a few weeks. “It was really Jason who pitched the idea.”

Paulsell said his parents were looking to exit the company, which was started nearly 50 years ago by his grandfather, Robert Kelsey, as a Hobart Sales & Service franchise. His parents became owners in 1992 after Kelsey retired. In 2014, the company broke off from Hobart and became Ozarks Food Equipment.

“My parents had kind of reached a point where they were going to retire,” Paulsell said, adding he and his brother, Steve, weren’t interested in taking over ownership.

Additionally, Paulsell said his brother was looking at other career options. Those factors, combined with the new coronavirus, helped facilitate the speed of the transaction.

“We used that as the excuse to go ahead and get it done,” he said, regarding the virus.

Work history
Arctic Food Equipment, started in 1994 by owner Mark McCartney, sells and services HVAC and commercial restaurant equipment, such as exhaust hoods and walk-in refrigeration units. Nathan McCartney came to work for his dad’s company in 2018, with plans to take over the family business within the next few years, according to past Springfield Business Journal reporting.

Paulsell said the 49-year-old Ozarks Food Equipment also offered sales and service to commercial kitchens, but its clientele was primarily grocery stores and school districts. Its territory ran west to Joplin, north to Sedalia, east to West Plains and south to Mountain Home, Arkansas.

“From Ozarks Food Equipment’s standpoint, we didn’t really look at them as competition,” Paulsell said, noting Arctic Food Equipment was a longtime client, occasionally buying parts. “We both handled two completely different parts of the industry. Arctic did a lot more restaurant work than we did, for sure. But they also did a lot more of the fast food, gas stations and things like that that we just never got into.”

Nathan McCartney said it was appealing to Arctic Food Equipment officials to expand to grocery store and school clients.

“I don’t know what the restaurant industry is going to look like the rest of this week, much less July or next January,” he said. “But I do know people are still going to go grocery shopping, and the school districts aren’t closing down.”

Declining to disclose revenue, McCartney said the service side of the company has been a little slower as restaurants have dealt with the challenges of temporary closures and layoffs amid the COVID-19 pandemic.

However, the sales side has been about 50% of business this year to make up for fewer service calls, he added.

Mark McCartney told SBJ last year the company’s sales component has grown over the years and will eventually surpass the service aspect.

The company has roughly 700 active service customers and 500 sales clients annually, with some overlap, Nathan McCartney said. The sales client total has increased by about 25% over the past year, including 20 new accounts since April.

Making accommodations
With the hiring of Paulsell, Arctic is exploring additional territories for the new parts department.

“This just helps us even more by not being reliant on third parties for parts,” Nathan McCartney said of adding parts sales.

The company is adding parts storage and counter space at its 21,000-square-foot facility at 1501 S. Enterprise Ave. McCartney estimates the roughly $2,000 project will wrap up this month.

It’s not the only work Arctic has tackled in recent weeks, as the company’s showroom – filled with sets of knives, mixers, fryers and kitchen staff clothing – underwent a rearrangement and new paint job. The project was completed as the city’s recent stay-at-home order limited customer traffic at the shop.

“Let’s do all the things you can’t do while you’re open and knock them out,” McCartney said of the in-house projects. “It’s been an exciting, kind of wild and crazy year.”