Compass Group Regulatory News (CPG)

Compass Group PLC announces proposed acquisition of CH&CO

22 January 2024: Compass Group PLC (LSE: CPG), a leading global food service company, has today signed an agreement to acquire CH&CO, a provider of premium contract and hospitality services in the UK and Ireland for an initial enterprise value of £475m/$600m1.

CH&CO has a highly regarded management team and a long track record of strong performance delivering a bespoke and high-quality food offer through several sector brands. The company currently generates annual revenues of c. £450m/$570m1 and operates across a range of sectors, including Business & Industry, Sports & Leisure, Education, and Healthcare. CH&CO has a diverse client base and broad geographic spread which would complement Compass Group's existing footprint in the UK and Ireland.

Dominic Blakemore, Group CEO of Compass Group PLC, said:

"CH&CO is a highly regarded food service business in our industry. This proposed acquisition combines the best of the two companies: our shared passion for people, great food, and focus on sustainability. With CH&CO's strong brand identity and a broad geographic reach, we would be able to further enhance our customer proposition, helping us capitalise on the significant growth potential in the market."

"The proposed acquisition is in line with our longstanding strategy to create value through disciplined capital allocation. Our strong cash generation and balance sheet give us the flexibility to invest in organic growth and to acquire high quality businesses with exceptional management teams, enabling us to further accelerate growth and enhance shareholder returns."

Bill Toner, CEO of CH&CO, added:

"We're delighted that Compass wants to acquire CH&CO. The prospect of joining a leading global provider of food services offers huge potential for us and our clients. Creativity and innovation are skills that we share with Compass and?food is at the heart of everything we do."

"Both businesses have strong and complementary brands, and subject to regulatory approval, there is a great opportunity for us to learn from each other and to build an?even more?exciting future together."

Transaction details

Initial enterprise value is £475m/$600m1 with an additional earn out over the two years following closing, dependent on the profit growth of the business. Completion of the proposed transaction is subject to regulatory approval.

Enquiries

Notes: 1 Based on exchange rate of $1.27 as of 19th January 2024