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Compass Group To Buy Fazer Group's Food Catering Business For €475 Mln

Food and support services company Compass Group Plc. (CPG.L,CMPGF.PK) announced Tuesday that it has signed an agreement to acquire Fazer Food Services from Fazer Group for an enterprise value of about 475 million euros.

Initial cash consideration would be 420 million euros, while the remaining deferred consideration is payable within seven years.

The final consideration will be dependent on closing balance sheet adjustments and the operation of an earn-out. The company will finance the deal with cash and existing credit facilities.

The acquisition requires EU Commission competition approval, a process which may take several months. Compass Group said it will update the market when appropriate.

Fazer Food Services, a food catering business, has operations in Finland, Sweden, Norway and Denmark. The company operates in several sectors including Business & Industry, Education, Healthcare, Seniors and Defence. Fazer Group is a family-owned FMCG and direct to consumer group.

The value of the gross assets in deal as of April 30 was 289.6 million euros. Over the twelve-month period to April 30, the company generated turnover of 593.0 million euros and EBITDA of 39.8 million euros.

Compass Group expects the acquisition would create more compelling and innovative solutions for its clients and consumers. The transaction is expected to achieve the company's acquisition criteria of returns greater than the cost of capital by the end of year two.

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