California Culinary to buy New York Restaurant School

Nation's Restaurant News, August 14, 1995 by Suzanne Kapner

SAN FRANCISCO -- The California Culinary Academy received another passing grade in its growth course by signing a letter of intent to purchase the outstanding stock of the New York Restaurant School, a privately owned culinary school in New York City.

The CCA's chairman, Theodore Crocker, said the academy is in the process of completing due diligence, and he expects the deal to close within 60 days, pending approval of the U.S. Department of Education.

Crocker would not disclose the price but said the deal would be a mixture of cash and stock.

The acquisition would give the CCA a bicoastal presence and further the academy's expansion goals, which were outlined when Crocker, with the help of a group of investors, purchased the academy from the McKesson Corp. in May 1987. In 1993 Crocker led an initial public offering and is now the largest shareholder, owning 36 percent of the company.

The CCA then completed five new kitchens in the San Francisco area; hired Keith Keogh, former executive chef at Walt Disney World, as executive vice president and chief operating officer; and signed a deal with Broadway Stores Inc., a chain of 83 department stores where the school will operate training centers and kitchens for consumer education programs.

Crocker said the NYRS bid was the logical next step.

"[The NYRS] fits with our core programs," he said. "It's a great addition to the academy."

Dr. James M. Devaney, NYRS president, voiced similar optimism about the impending deal.

"We're very pleased," he said. "It's a great opportunity for both colleges. It's a good marriage."

Under the agreement, the restaurant school will continue operating under its trademark as a division of the academy.

"We didn't go for a weak link or something we could buy cheap," Crocker said. "We wanted something with a sound management team in place. We don't see making any changes."

William E. Waterman Jr., a managing director with Thomas Green Securities Inc. in Los Angeles, said the academy is paying a fair price. He added that the curricula at the two schools are a good fit.

"We are really encouraged by this transaction," he said. "I don't foresee any problems in [obtaining approval] from the Department of Education."

Waterman said both schools are in the top 10 percent for job placement and have very low default rates on their student loans.

He added that as the CCA makes additional acquisitions in the future, it will play the role of a holding company and allow local management to run the programs.

Founded in 1977, the school offers a 16-month culinary-arts degree program and a 30-week baking and pastry arts program. The academy also produces the television series "Cooking at the Academy," which airs on PBS.

The NYRS was started in 1981. It offers eight- to 10-month programs for culinary arts, culinary skills, restaurant management and pastry arts.