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Compass acquires Nordic food catering business

Compass Group has signed an agreement with Fazer Group to acquire Fazer Food Services for an enterprise value of approximately €475 million (£421 million).

Fazer Food Services is a renowned food catering business in the Nordic region with operations in Finland, Sweden, Norway and Denmark, across several sectors including Business & Industry, Education, Healthcare, Seniors and Defence.

The acquisition will further strengthen Compass’ presence within the region. According to Compass, 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”.

Dominic Blakemore, CEO of Compass Group PLC, said: “Fazer Food Services is a highly regarded food service business in the Nordic region, and like Compass, is focused on high-quality food, culinary innovation, sustainability and great customer service. I am excited that, together with our existing colleagues in the region, we will be able to further enhance our customer proposition in the Nordic market.”

Christoph Vitzthum, President and CEO of Fazer Group, said: “We believe Compass will provide a great home for Fazer Food Services. It is a leading food services business with a global reach and a strong purpose. Our two companies share similar values with a clear focus on food, outstanding customer service and a commitment to people. Whilst we are sad to see many of our colleagues leave Fazer Group to join Compass, we believe this acquisition will allow Fazer Food Services to achieve its full potential.”

Initial cash consideration is estimated to be €420 million (£373 million) with the remaining deferred consideration payable within seven years. The final consideration figures will be dependent on closing balance sheet adjustments and the operation of an earn-out. The transaction will be financed using cash and existing credit facilities.

The value of the gross assets that are the subject of the transaction as at 30 April 2019 was €289.6 million (257 million).  Over the twelve-month period to 30 April 2019, the Company generated turnover of €593.0 million (£527 million) and EBITDA of €39.8 million (£35 million).

The proposed acquisition requires EU Commission competition approval, a process which may take several months.

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