Europe’s third-largest catering group Elior (ELIOR.PA) expects to make at least one acquisition in the United States and one in Britain before the end of the year, its chairman and chief executive said.
Philippe Salle told Reuters that Elior was in advanced talks with several companies in Britain but had avoided taking decisions before Britain’s referendum on EU membership, taking place on Thursday, as the result could affect valuations.
“Before signing, we need to know what is going to happen with the vote (on EU membership) tonight because it will have an impact on the pound level,” Salle said in an interview.
A Reuters poll has forecast the British pound would slide 9 percent against the dollar in the immediate aftermath of a vote to leave the EU.
“Our goal is to seal at least one deal before the end of the year in Britain and one in the United States. That can be done,” Salle said.
Elior, which competes with France’s Sodexo (EXHO.PA) and Britain’s Compass (CPG.L), is looking to buy catering companies with annual revenue of $50-300 million in the United States and of 20-100 million pounds ($30 mln-$148 mln) in Britain.
Founded in 1991, Elior, which has a market value of 3.4 billion euros ($3.9 bln), has a contract arm, which provides catering to businesses, schools and hospitals and accounts for around two-thirds of the firm’s overall business.
It also has a concessions business, which serves airports, railways and motorways.
Elior, whose clients range from the Vatican museum to France’s La Poste, in September 2015 earmarked up to 1 billion euros for acquisitions between 2016 and 2020, saying it wanted to reach total annual sales of between 7 billion and 8 billion euros by 2020 and triple U.S. sales to around $2 billion.
In Britain, Elior is eyeing the No. 3 spot against its current No. 5 position and expects sales in the country to contribute 10 percent of group turnover by 2020 against 7 percent now.
In the United States, Elior’s biggest market after France, the goal was for revenue to generate 20-25 percent of group sales by 2020 against 15 percent now.
Elior entered the U.S. contract catering market with the 2013 acquisition of TrustHouse Services. It has been stepping up acquisitions since its listing in June 2014, notably buying ABL Management, Cura Hospitality, and Starr Restaurant Catering, a U.S. firm that offers high-end catering services.
In May, it spent about $120 million to buy Preferred Meals, a U.S. provider of meals, and pre-prepared snack meals, serving the education and senior markets, Salle said.
Elior, which had sales of 5.7 billion euros in the fiscal year ended September 2015, generates 49 percent of its sales in France but that ratio could fall to 40 percent by 2020, he said.
(Writing by Dominique Vidalon; Editing by Andrew Callus and Susan Fenton).
http://www.reuters.com/article/us-elior-m-a-idUSKCN0Z91OM
Source: Reuters.com