EQT, Macquarie acquire SSP for £1.8bn

EQT has acquired contract caterer Compass Group’s airport and railway concessions business, while Macquarie has bought its UK motorway services arm.

Contract catering business Compass Group has agreed to sell its travel concession catering arm Select Service Partner (SSP) through two separate sales to Stockholm-headquartered private equity firm EQT and Australia’s Macquarie Bank for a combined £1.82 billion (€2.62 billion; $3.18 billion).
 
Compass has sold its UK motorway services business Moto to Macquarie, with the remainder of the business going to EQT. Compass said the sale price represented an exit multiple of 16x SSP’s 2005 EBITA and 10.9x 2005 EBITDA.
 
The transaction, subject to regulatory approval, is expected to complete in June.
 

SSP is the first deal we have done in the UK and one of the biggest we have ever done globally.

Jan Stahlberg, senior partner, EQT

According to press reports, EQT and Macquarie saw off competition in the final round of the auction, run by Citigroup, from private equity firms CVC Capital Partners, PAI Partners and Terra Firma Capital Partners.
 
Individual sale prices were not disclosed, but EQT is understood to have paid around £1.2 billion for the airport and railway concessions business, with Macquarie stumping up approximately £600 million for Moto.
 
Jan Stahlberg, senior partner at EQT, told PEO the firm made its investment from EQT IV, which closed on €2.5 billion ($3 billion) in August 2004. Stahlberg said that SSP will be the sixth transaction from the vehicle, which is currently approximately 50 percent invested.
 
Stahlberg added that the SSP transaction will be one of EQT’s largest transactions to date. “SSP is the first deal we have done in the UK and one of the biggest we have ever done globally,” he said. “We don’t have any other assets in our portfolio in this sector, although we have a number of service operation investments. But we know the asset pretty well and we had a lot of help from Macquarie, which provided information on airports and trends from their infrastructure experience.”
 

Upper Crust: one of the brands EQT will acquire through SSP

Headquartered in Surrey, England, SSP operates in 26 countries, providing catering for roadside, railway and airport concessions, with a principal focus on the UK, Continental Europe and the US. The business employs approximately 25,000 people in around 2,000 fast food kiosks, including Upper Crust and Caffe Ritazza, in 600 transport hubs.
 
After the disposal, Compass said it will retain a small part of the travel concession catering business in Japan and Portugal. In the year ended 30 September 2005, SSP recorded profits of £114 million on turnover of £1.8 billion.