- Compass Group eyes CH&Co
- Potential £400 million acquisition
- Strengthens premium catering position
The FTSE-100 contract caterer, Compass Group, is currently negotiating to acquire CH&Co, a competitor known for providing catering services at prestigious British venues such as Kew Gardens and the Royal Opera House.
Compass is finalizing a transaction to acquire CH&Co, a private equity-backed company, for over £400 million, with a potential announcement expected this week.
While this acquisition would be Compass’s most extensive in the UK in years, its market capitalization, exceeding £37 billion, diminishes the transaction’s significance from a valuation standpoint.
The potential acquisition aims to strengthen Compass’s position as a leader in the premium segment of the contract catering industry.
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CH&Co, headquartered in Reading, caters to various sectors, including tourist destinations, workplaces, and institutions, serving clients such as the Old Royal Naval College, the Royal Academy of Arts, and the Southbank Centre.
Equistone, a private equity firm supporting CH&Co since 2019, is expected to see significant success with the exit, having orchestrated smaller takeovers for CH&Co during its ownership, including Blue Apple and Pabulum.
Compass had raised £2 billion in 2018 from shareholders to navigate the pandemic’s challenges, with the sale to CH&Co representing part of its strategic acquisitions post-pandemic.
The catering and hospitality industry, severely impacted by COVID-19, witnessed a recovery reflected in Compass’s stock price, which more than doubled from its initial offering at 1025p.
Compass shares closed at 2170p on Friday, marking a 14% increase over the previous twelve months.
Rothschild bankers are reportedly advising Equistone on the sale of CH&Co.
