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27 June 2019
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COMPASS ACQUIRES NORDIC FOOD SERVICE GROUP FOR £420M

Money © iStock
Compass acquires Fazer Food Services © iStock

12 June 2019 | Herpreet Kaur Grewal


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

 

Fazer Food Services is a catering business in the Nordic region with operations in Finland, Sweden, Norway and Denmark. It works across several sectors including business and industry, education, healthcare, defence and the seniors’ market.


Compass said 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, said: “Fazer Food Services is a highly regarded food service business … and like Compass, is focused on high-quality food, culinary innovation, sustainability and great customer service.”


The initial cash consideration is estimated to be at least £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 £257 million.  Over the year to 30 April 2019, the company generated turnover of £527 million and EBITDA of over £35 million.


The proposed acquisition requires EU Commission competition approval, a process that could take several months, and Compass said it would update the market as appropriate.