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ARI Chief Executive Jack MacGowan: “This represents a significant investment for ARI in a high priority market where we can continue to enhance margins and operating efficiencies” |
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CYPRUS. ARI Group has conditionally agreed to acquire a further 50% shareholding in CTC-ARI – the company operating retail at Larnaca and Paphos airports – from its Cypriot partner Ermes Department Stores, part of the Shacolas Group of Companies.
The deal, agreed last night, will give DAA-owned ARI Group full control of retail operations at the two Cyprus airports. The stake will be bought for a cash consideration of €54 million.
CTC-ARI operates at Larnaca and Paphos airports under a long-term exclusive concession arrangement to 2031. The business generated turnover of €88 million in the year to 31 December 2013. It operates through around 5,000sq m of retail space, and employs 375 people across both airports.
Aer Rianta International CEO Jack MacGowan said: “We are extremely pleased to have the opportunity to add substantially to our shareholding in this valued concession in Cyprus, which will contribute immediately to ARI’s profits.
“This represents a significant investment for ARI in a high priority market where we can continue to enhance margins and operating efficiencies. The investment demonstrates our commitment to growth in ARI’s broad Middle East region where we are a leading player and where we operate many successful local equity and business partnerships.”
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Speaking to The Moodie Report shortly after the deal was announced, MacGowan said that the acquisition fits well within Aer Rianta International’s regional focus and its strategy to grow the business.
He said: “We are focused on growing the Middle East and Indian geographies where we are already the leading operator. This is a move to increase and consolidate our operations in that region.
“It will be profit accretive immediately, although it doesn’t increase the overall managed turnover, and it is an important deal for us. It shows the confidence of the ARI executive and our shareholder in doubling the value of our global business in the next four years.”
The 17 years remaining on the concession term was a crucial attraction, said MacGowan, as is the growth potential of the Cyprus tourist market, which he said had remained buoyant even during a period of economic challenges.
“We believe that Cyprus is emerging from the bottom of the cycle and is well on its way to a recovery,” MacGowan said. “The tourism business has shown its resilience over the past year, and we expect it to grow and to be a very competitive market compared to those around it, specifically Egypt and Turkey.”
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As reported, in January Aer Rianta International Middle East acquired Shacolas Group of Companies’ 25.01% stake in the food & beverage operation at Cyprus airports for a consideration of €3.125 million, taking its holding in the venture to 50.02%.
In its annual results published earlier this month, ARI parent company DAA (Dublin Airport Authority) highlighted a “very impressive performance” at airports in Cyprus last year, despite “continued national economic challenges”. ARI’s operations generated managed turnover in excess of €850 million in 2013.
Completion of the transaction is subject to certain conditions and regulatory approvals and is expected to take place in the third quarter of 2014.
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