The world's largest catering group, Compass Group, continues its expansion strategy in Europe. After acquisitions worth $1.7 billion in the region last year, the company plans further purchases to benefit from the strong demand for outsourcing services.
Only this week, the FTSE 100 company announced plans to acquire the Norwegian catering and facility management provider 4Service for $500 million. In November, Compass completed the purchase of Dupont Restauration, a French catering company, for approximately $300 million. This was joined by previous acquisitions of Hofmanns, a German manufacturer of frozen meals, and the British CH&CO, which supplies locations including Kew Gardens and the Royal Opera, totaling a value of $900 million.
One or two more acquisitions will follow," said CEO Dominic Blakemore to the Financial Times. Compass is particularly interested in acquisitions in the area of food purchasing to expand the concept of "Open Cafés" - unmanned sales points in offices with snacks and coffee.
The expansion comes in the context of a successful fiscal year. For the year ending on September 30, Compass recorded a 16.4 percent increase in operating profit to $3 billion. Revenue rose by 10.6 percent to $42.2 billion. The business benefited from the return of many employees to offices, who are increasingly seeking favorable alternatives to restaurants, as well as from the rising demand for catering services at concerts, festivals, and corporate events.
Companies increasingly use food to promote social interactions and connect their teams," said Blakemore.
Compass withdraws from less profitable markets such as Chile, Mexico, China, and Brazil simultaneously to free up funds for investments in Europe. Blakemore stated that the acquisition of CH&CO had created a strong position in the creative and media sector, while the purchase of Dupont expanded the presence in Northern France. Hofmanns' freezing technology also allows Compass to serve smaller businesses without their own kitchens.
The corporation aims to shape its European business following the model of the North American expansion. There, between 1994 and 2017, Compass acquired a total of 18 companies, including Bon Appetit in the technology sector and Morrison Management Specialists, which specialize in nursing homes and hospitals. The North American market now accounts for 70 percent of total revenues.
