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British Caterer Compass To Buy Nordic Rival Fazer Food For €475m

Published on Jun 14 2019 10:30 AM in Food tagged: Trending Posts / Compass Group / Fazer Food Services

British Caterer Compass To Buy Nordic Rival Fazer Food For €475m

British catering group Compass has agreed to buy Nordic rival Fazer Food Services for approximately €475 million, the two companies have announced.

In the past year, Compass, which provides meals for office workers, armed forces and school children in more than 50 countries, has been cutting costs and focussing on its food business, while reducing non-core operations.

"A Very Attractive Acquisition"

"This is a very attractive acquisition for Compass Group, which already has a presence in the region. The transaction is expected to achieve the company's acquisition criteria of returns greater than the cost of capital by the end of year two," Compass said in a statement.

Finland-based Fazer Food Services employs 7,000 employees at more than 1,000 sites in Finland, Sweden, Norway, Denmark, and Estonia.

Compass will pay €420 million in cash, with the rest of the acquisition payment payable within seven years, dependent on closing balance sheet adjustments and the operation of an earn-out.

"Compass is already present in the region, which should be helpful for cost synergies," analysts at Jefferies said in a note. "The asset appears to be sub-scale at present and may have been a slightly neglected non-core element of a larger FMCG group."

Fazer Turnover And EBITDA

Fazer Food Services generated turnover of €593 million and EBITDA of €39.8 million in the 12 months that ended on April 30.

Smaller Post-Deal

After the deal is approved by regulators, Fazer will be a much smaller company, focussed on its bakery and confectionary business, as Food Services generated 37% of its 2018 turnover and employed 45% of its staff.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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