INTERNATIONAL. Paris-based private equity firm PAI Partners has made a binding offer to acquire travel dining concessionaire Areas from Elior Group, with the deal representing an enterprise value of €1,542 million.
Areas is the world’s number three player in contract catering and a major force in airport food & beverage. It generated €1,832 million in revenue in fiscal year 2017-2018 and employs 23,000 people in 13 countries. it has operations that span airports, railway stations and motorway service plazas.
Elior Group Chief Executive Officer Philippe Guillemot said: “PAI Partners’ project would enable Areas, which is the world’s third-leading concession caterer, to accelerate growth. Following the disposal the group would focus entirely on its contract catering and services businesses in order to reinforce its leading positions in Europe, and accelerate its development in the United States and India.”
The deal is expected to close this summer. Sale proceeds would be used to reduce Elior Group’s leverage ratio to a range between 1.5 and 2.0 times EBITDA. Within this range, Elior said it could give the rescaled group the resources required to pursue expansion, buy back its own shares or distribute dividends to its shareholders.
In November, Elior Group announced that it was carrying out a review of strategic options for its concession catering activities, which are grouped within its Areas subsidiary.
At the time, Elior said that the review, “which could lead to the separation of Areas from the rest of the Group”, was intended to accelerate the development of its activities and create value for Elior Group shareholders.
In the coming weeks, the required information and consultation procedures will be conducted with the Elior Group’s employee representative bodies, which is a prerequisite to a definitive sale agreement. The closing of the transaction would be subject to the usual conditions associated with this type of transaction, Elior said.
PAI Partners was a shareholder in travel retailer The Nuance Group from 2010, before selling its stake to Dufry in 2014 for CHF1.55 billion.
More comment and analysis on this breaking story will follow soon.
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