Catering giant Compass Group PLC (LON:CPG) is acquiring Nordic food specialist Fazer Group for cash and debt of approximately €475mln.
Fazer supplies more than 1,000 restaurants across Scandinavia and Finland, serving 500,000 meals a day on average with annual turnover of €593mln. The consideration will be €420mln in cash payable upfront and a deferred amount over seven years.
READ: RBC downgrades Compass as future direction becomes less clear
Dominic Blakemore, Compass‘ chief executive, said: "Fazer Food Services is a highly regarded food service business in the Nordic region, and like Compass, is focused on high-quality food, culinary innovation, sustainability and great customer service.”
In a note to clients, analysts at UBS commented: “Our first impression is that the acquisition of Fazer Food Services is a positive for the Compass investment case although benefits likely seen from 2020.”
The Swiss bank repeated a ‘buy’ rating and 1,910p price target on Compass shares which in afternoon trading were 0.8% lower at 1,843.50p.
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