Doughnuts to Dollars

Recent business school graduates have good reason to worry about the decreasing number of firms eager to employ their talents. But at least one young man has parlayed his business administration studies into a $120 million-a-year business. When he wrote his master's thesis at New York University four years ago, Steven Sanford Fink compiled a formidable catalogue of the virtues of acquiring a number of related companies and rolling them into one. He also attempted to put together a master plan for making just such a group of acquisitions himself. Then he followed his own advice. Today, at 28, he is chairman of International Foodservice Systems Inc. (IPS), and he claims to be the youngest chief executive of any company listed on the American Stock Exchange. Figuring that Fink was not the proper name for a titan with his credentials, he dropped it in 1968 and legally became plain Steven Sanford.

An Idea and $1,000. While he was still at N.Y.U., Sanford singled out the food-service industry as ripe for consolidation. He noted that restaurants, hotels, hospitals and other institutions that serve food often have to buy their supplies from a number of sources--meat from one distributor, fish and seafood from another, produce from still another. Sanford sensed the need for an all-in-one service that would provide a complete line of foods--from goose to mousse. To get a grasp of the gossip and personalities in the industry that he had chosen, he bought three years' back issues of trade publications and studied them from cover to cover.

With only his idea and $1,000 as assets, Sanford spent a frustrating six months seeking capital. Finally, in 1968, Wall Street's Allen & Co. and the Value Line Development Capital Corp. anted up $2,350,000, and Sanford founded IPS. With his new bankroll, he bought three meat, grocery and restaurant-equipment companies in Puerto Rico and the Virgin Islands and put them together to serve the Caribbean market. They prospered, and Sanford continued to follow his college plan precisely. He bought other companies in exchange for IPS stock. In all, he acquired 13 companies--in New York, California, Florida, Arizona, Hawaii and the Bahamas--and turned most of them into integrated food suppliers. His firm has also gone into the business of supplying prepared meals by acquiring Manhattan-based Office Canteens, the only company in the industry that specializes in hot meals for workers to carry back to their desks on trays.

IFS went public in March, and Sanford's share is worth more than $4,000,000; the original investors' $2,350,000 stake has multiplied to $33 million in stock. Sanford is already thinking about other acquisitions. "Europe is 20 years behind the U.S. in this industry," he says. "We'll be looking in that direction, too, some day."

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