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Compass tastes EUR 475mn deal for Fazer
Posted on Tuesday, 11 June 2019 13:48
Compass Group of the UK has agreed to acquire Nordic food catering company Fazer Food Services for EUR 475.00 million in a bid to expand its operations in Finland, Sweden, Norway and Denmark.
As part of the deal, the buyer will pay an initial EUR 420.00 million in cash at closing, with the remaining consideration to be deferred for a period of up to seven years.
The last instalment will be dependent on closing balance sheet adjustments and the operation of an earnout.
Compass will finance the payment using cash and existing credit facilities and said the deal is subject to competition approval from the European Union Commission, which could take several months.
Fazer claims to be a renowned food catering business serving 500,000 meals a day across several sectors, including business and industry, education, healthcare and defence, with over 7,000 employees and more than 1,000 restaurants.
The transaction is expected to achieve Compass’ acquisition criteria of returns greater than the cost of capital by the end of year two.
Fazer’s gross assets, which are the main subject of the deal, were worth EUR 289.60 million at 30th April 2019, with the company generating earnings before interest, taxes, depreciation and amortisation of EUR 39.80 million on revenue of EUR 593.00 million in the 12-months to the same date.
Compass is billed as a leading global food service company, operating in 45 countries, with over 600,000 staff and providing 5.50 billion meals per year.
The group generated revenue of GBP 12.50 billion in the six months ended 31st March 2019, a 6.6 per cent increase from GBP 11.70 billion in the corresponding period of 2018.
Operating profit rose 5.8 per cent to GBP 951.00 million in the first half of fiscal 2019 (H1 2018: GBP 899.00 million).
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