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UK contract foodservice giant SSP Group plc is taking a bigger share of the Australian airport sector, including entry into the Gold Coast and Canberra markets, after securing a deal to acquire the privately owned Airport Retail Enterprises.
The London-based SSP Group, which operates in 36 countries and generates annual revenue of more than $4 billion, first entered the Australian market in 2007 and currently operates 40 units across seven airports, namely Sydney, Melbourne, Brisbane, Perth, Hobart, Darwin and Alice Springs, as well as Sydney’s Central Railway Station.
The takeover deal for Airport Retail Enterprises, financial details of which have not been disclosed, will boost the company’s Australian operations to more than 100 units across 11 of the country’s largest 19 airports.
It will also mark the addition of four new airports to the SSP portfolio at Canberra, Gold Coast, Townsville and Mount Isa.
Airport Retail Enterprises, founded by Peter Butts in 1971, generates annual sales of about $200 million from 62 outlets, comprising bars, restaurants and cafes, across airports in NSW, Victoria and Queensland. The company also operates five outlets in the UK at Heathrow, Gatwick and Luton.
SSP Group says the acquisition is aimed at accelerating growth in the Asia Pacific region where it has operations in Hong Kong, Philippines, Thailand, Malaysia and Singapore.
Patrick Coveney, CEO of SSP Group, says Airport Retail Enterprises delivers a ‘high quality and highly complementary business in Australia’.
“The acquisition will increase our portfolio of brands and concepts, give us entry into new prime air locations, enhance our position as a leading airport F&B operator in the country and create significant value for shareholders,” he says.
"The Asia Pacific region offers a significant opportunity to build returns and drive growth for the group.
“Our enlarged business in Australia will have the opportunity to become a regional centre of excellence. We look forward to welcoming 1,500 colleagues from the ARE business to our team."
Australian Retail Airports founder Peter Butts describes the acquisition as a ‘major milestone’ for the group.
“The acquisition will allow the combined business to offer an even wider range of high-quality F&B selections and maintain an unwavering commitment to excellence in the airport environment,” says Butts.
“I would like to take this opportunity to thank all of our team members who have played such an integral role in growing ARE to the business it is today."
The acquisition, which is still subject to regulatory approval, is expected to settle by the end of June.
SSP Group says the acquisition will be immediately earnings accretive, although integration costs in the current financial year will initially offset these gains.
SSP is funding the acquisition, which is reported to be as much as $160 million, through the company’s existing cash and credit facilities.
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