Compass is on the hunt for more deals in Europe, after the world’s largest caterer spent a total of $1.7bn on a series of acquisitions in the region over the past year in a bid to tap strong outsourcing demand.
The FTSE 100 group, which provides food for work and school canteens in about 30 countries, announced this week that it agreed to acquire 4Service, a catering and facility management services business in Norway, for $500mn. This followed an announcement in November that it has completed the acquisition of Dupont Restauration, a food services business in France, for roughly $300mn.
The company had already spent $900mn on acquiring Germany’s pre-prepared frozen meals producer Hofmanns and the UK’s CH&CO, the hospitality provider for Kew Gardens and the Royal Ballet and Opera, in the year ended September.
“There will still be one or two [deals] over time,” chief executive Dominic Blakemore told the Financial Times, adding that he was keen to explore deals related to food purchasing to build more “open cafés” — unstaffed stores set up in offices to sell chilled food and coffee.
He added that on top of booming food service demand for concerts, festivals and sporting events, catered events for companies were also increasing. “We see clients really using food to power socialisation, to bring people . . . and get them reconnected on particular topic areas,” he said.
Compass’s interest in further M&A comes as it reported a 16.4 per cent rise in its underlying operating profit to $3bn for the year ended September 30, with revenue up 10.6 per cent to hit $42.2bn.
The group was boosted by more workers returning to offices, many of them seeking cheaper alternatives to high street lunches, and was expecting to deliver “high single-digit profit growth” for the current fiscal year.
Compass also disclosed it is pulling out from four markets, including Chile and Mexico, in addition to five markets including China and Brazil announced in May, to allocate more funds for takeovers and investments in Europe.
Blakemore said that the takeover of CH&CO gave Compass a strong footprint in the creative arts and media industries, while that of Dupont opened up the business in the north of France where Compass had not been present.
Acquiring Hofmanns would allow Compass to use its frozen technology to be able to serve prepared meals to small companies without kitchen facilities, he added.
Blakemore said he was keen to replicate in Europe the model Compass built in North America “where we bought the best operator in each of the sectors or regional markets”.
Its business in North America now accounts for about 70 per cent of the group’s revenues after the company bought 18 companies in the region between 1994 and 2017, including tech sector-focused food service operator Bon Appetit and Morrison Management Specialists which specialises in care homes and hospitals.
