Compass sells Select Service Partner unit |
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Published
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Mon, 10 Apr 2006 11:35
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LONDON: Britain's catering company Compass Group Plc. is selling its travel concessions unit Select Service Partner, to investors including Macquarie Bank and EQT Partners for about 1.82 billion pounds in cash.
Compass said while a consortium led by Macquarie Bank will acquire the motorway services arm of Select Service Partner, EQT will buy the airport and railway food concession business of the unit.
The company also announced that it has sold 90 per cent of its European Inflight catering business, a further part of its travel concession catering business.
The company will return 500 million pounds from the sale to shareholders through buybacks over the next 18 months and pay 275 million pounds to its pension plans. It is also earmarking 250 million pounds to acquire the 51 per cent stake it does not hold in Levy Restaurants in the U.S. and the rest to pay back debts.
The Select Service Partner unit offers catering for roadside, railway, and airport concessions in some 26 countries under brands like Upper Crust and Burger King. It has outlets at sites like London's Waterloo Station and Paris's Gare du Nord.
The unit had operating profit before goodwill of 114 million pounds for the year ended 30 September 2005, on sales of 1.8 billion pounds.
Compass' finance director Andrew Martin said the company will now be focusing on its core contract catering and support services and with the sale it will be able to exploit the organic growth opportunities from a strong financial base.
The catering company's another unit, Eurest Support Services, is facing legal cases relating to supplies contracts with the United Nations. The U.N. had suspended the company as a registered vendor pending an inquiry into charges that the unit had obtained information concerning a three-year contract to supply food and water to the U.N's peacekeeping forces in Liberia, before it bid for the contract. Compass said in February that investigations conducted by lawyers and auditors had found irregularities in obtaining the contract and the action taken by some members of the staff was not above board.
The company will have a new chief executive, Richard Cousins, formerly with plasterboard maker BPB, from June this year, when incumbent Michael Bailey steps down.
Compass shares rose to 236.25 pence, giving the company a market value of 5.10 billion pounds.
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