Compass aims for June completion on brand sale
14 April, 2006
Catering giant Compass plans to complete the sale of brands, including Upper Crust, Millie’s Cookies and Caffè Ritazza, to new owner EQT Partners after announcing the deal this week.
The brands form part of its Select Service Partner (SSP) division, which has 2,000 outlets at airports, train stations and roadside service areas in 26 countries, including the UK and America. EQT, a Swedish private equity group, is to buy SSP’s airports and railway business for an estimated £1.2 billion. Meanwhile, Sydney-based Macquarie Bank is to take over the Moto motorway service station arm and the franchise of Little Chef for around £0.6bn.Compass director of corporate affairs Paul Kelly told British Baker the split must be approved by European and North American competition authorities. But Compass does not anticipate any problems, and the sale is expected to go through in June. Compass has signed five-year supply contracts with the new owners, he added.EQT senior partner Jan Stahlberg said: “We are delighted to be the new owner of SSP. It has a strong management team and operates in an attractive market, with increasing levels of passenger growth globally, in both air and rail. And it fits with EQT’s strategy to invest in companies of with substantial growth and development potential.” EQT works in close co-operation with the management of the companies it acquires, to develop and implement value-enhancing strategies. In total it has invested in 41 companies.Compass, based in Chertsey, Surrey, unveiled plans to sell the units last autumn, to focus on its core contract catering business. The SSP sale follows several profit warnings. Compass said it plans to return £500m from the sale proceeds to shareholders over the next 12 to18 months and make an additional £275m contribution to its pension plan.The deal is likely to be the last under outgoing chief executive Mike Bailey. His replacement, Richard Cousins, will join Compass in June.