Compass Group boss: 'Time is right' for CH&Co acquisition

09 February 2024 by
Compass Group boss: 'Time is right' for CH&Co acquisition

The chief executive of Compass Group has said the "time is right" for the business to take over rival caterer CH&Co as it eyes further growth in Europe.

Dominic Blakemore said both companies had held discussions for several years before the £475m acquisition was announced in January.

Compass has signalled plans to step up its acquisitions strategy in Europe and acquired German caterer Hofmann-Menü Holdings, which offers fresh frozen menus for the health, senior living, and education sectors, for an estimated £237m at the end of last year.

Speaking on a call to investors, Blakemore said Compass acquisitions in North America had helped "differentiate" its business model, and the caterer was now looking to do similar in Europe.

"Opportunities are coming to market," he said. "We've been building relationships for a number of years.

"We've announced CH&Co, which is absolutely terrific. It's got a fantastic management team. It's a business we've been talking to for many years. We've had…discussions before but covid intervened, cost of living intervened, inflation intervened. It feels now is the right time."

The deal will see CH&Co brands including B&I caterer Vacherin and Company of Cooks, which caterers for the Royal Opera House and Kew Gardens, join Compass' family of brands.

"When we look at that we know there is a huge complimentary sub-sector but also regional presence," added Blakemore.

"We don't believe the businesses will compete with each other. They can exist together and the financials are very attractive with the opportunity for growth acceleration and cost synergy over time."

Blakemore was speaking following the release of Compass' Q1 trading update, which reported revenue growth of 13% in Europe and 11.7% worldwide.

The company said like-for-like growth had been better than expected, "especially in B&I", while it was on track to report underlying operating profit growth of around 13% for 2024.

Compass said its focus was on "significant structural growth opportunities" in its core markets and would continue to reshape its portfolio.

The firm also disposed of its small business in China in January.

Compass operates in over 4,000 locations across the UK and Ireland and employs tens of thousands of people.

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