Advent International has agreed to acquire airport retailer Hudson Group for an undisclosed amount. The deal will be Advent’s tenth investment in the travel-related business sector, but its first portfolio company in that sector based in the US.
The Hudson Group operates around 550 newsstands, bookstores, cafes and specialty retail concessions, including 400 Hudson News stores, in 69 airports and transportation terminals in the US and Canada. The company is predicted to earn revenues of more than $630 million (€438 million) in 2007, according to a statement.
Travel-related businesses are an attractive opportunity for Advent for several reasons, said managing partner David Mussafer. The global travel industry is growing, particularly in some emerging markets, giving rise to increasing demand for both travel-related services and airport infrastructure investment.
Advent is well-positioned to help these companies, Mussafer said, because it offers portfolio companies both operating experience and industry relationships.
“Companies must manage the relationships and gain the concessions to operate the airport, in addition to the actual operation of the business itself,” Mussafer said. “A lot of players are good at one or the other, but very few are good at both.”
Even the problems in the US airline industry during the past few years have not dampened growth in the airport business sector, Mussafer said, noting that as airlines cut back on in-flight frills and security measures restrict what passengers can bring into the airport, businesses like Hudson and Aerocomidas can offer amenities to improve the travel experience.
Advent said it will pursue strategic add-ons for Hudson, and will expand the brand globally. Hudson’s president and founder, Mario DiDomizio will continue in that role after the acquisition. Hudson’s current owners, James and Robert Cohen, will retain a minority stake in the company.
In the past 15 years, Advent has invested in nine other airport food and beverage retailers, duty-free stores and airport concessions, many of which are based in Latin America. The firm has invested in airport restaurant operators Aerocomidas in Mexico and Grupo RA in Brazil, as well as a Brazilian casual n,dining chain, La Mansio which has expanded into airports. Advent has also bought stakes in Brazilian duty-free retailer Brasif, and Switzerland-based duty-free retailer Dufry.
Advent’s investments in airport concession operators include Fumisa, which operates Mexico City International Airport, and AMAIT, which operates the Toluca International Airport in Mexico. Advent also invested in Aeroplazas, the commercial developer of the Puerto Vallarta and Guadalajara airports.