Compass has agreed its biggest-ever acquisition with a €1.5bn deal to buy Dutch food services business Vermaat from private equity firm Bridgepoint.
The British group, which provides catering services for offices, schools and other venues, stated that the deal will help it expand in Europe and diversify outside of North America, which accounts for the bulk of its revenues.
Vermaat is described as a “leading premium food services business in Europe, offering tailored on-site food concepts, delivered-in solutions and strong consumer-focused retail expertise”. It has more than 700 outlets, including in France and Germany, key growth markets for Compass.
The deal marks the latest in a string of acquisitions by Compass, which has been spending heavily in Europe to tap into booming food service demand at concerts, festivals and sporting events. It has spent €1.1bn on deals in its current financial year, including €355mn to acquire 4Service, a catering and facility management services business in Norway.
The Vermaat transaction is subject to regulatory approval. Upon completion, its management team will join Compass and will continue operating the business on a standalone basis, whilst leveraging the benefits of being part of the larger group.
Dominic Blakemore, Group CEO of Compass, commented: “We are proud to announce this landmark acquisition. Vermaat is a best-in-class food services business which will significantly strengthen Compass Group’s premium offer across Europe and will provide us with exceptional leadership talent. This strategic acquisition represents a step change in our core markets by creating a strong platform for expansion across Europe.”
Rick Zeelen, CEO of Vermaat, added: “Compass and Vermaat are highly complementary businesses with similar cultures and priorities. The leadership team remains fully committed to executing its European growth strategy.
“Together, subject to regulatory approval, we will be able to provide clients with an even more compelling proposition in a highly attractive growth market, accelerating our premium offering in Europe. We look forward to joining Compass and the exciting journey ahead.”
In a third-quarter trading update (to 30 June) released today, Compass revealed that its organic revenue had climbed a healthy 8.6%. Both its regions performed well, with North America up 9.6% after seeing strong growth across all sectors. Growth in its International unit was slightly lower (+6.6%) compared to the previous quarter, due to “mobilisation timings”.
Compass noted that the integration of its recent acquisitions was progressing ahead of expectations, which helped to boost its annual outlook. It is now expecting underlying operating profit growth to be towards 11%, compared with an earlier forecast of high single-digit growth.
