14th May 2007 07:00
Compass Group PLC12 May 2007 12 May 2007 Sale of Selecta and Share buy-back programme extended to £1 billion Compass Group PLC ("Compass") is today pleased to announce that it has agreed tosell its European vending business, Selecta, to a company managed by AllianzCapital Partners GmbH ("ACP") for a consideration of £772.5 million on a debtand cash free basis, subject to customary closing adjustments (the "Disposal"). • The sale price for Selecta represents an exit multiple of 16 timesSelecta's 2006 Operating Profit before goodwill amortisation (EBIT) and 8.5times Selecta's 2006 EBITDA • Tax and other transaction costs are anticipated to be approximately£20 million • Compass intends to return £500 million of the proceeds to itsshareholders by way of a share buy-back programme over the next 12 - 18 months.This is in addition to the return of £500 million to shareholders, following thesale of SSP and Moto in 2006, taking the total share buy-back to £1 billion • £45 million will be contributed to Compass's UK pension plans, takingthe total amount of special contributions to the Compass UK pension plans overthe past 12 months to £325 million • The balance of the proceeds will be used to reduce net debt • The Disposal is conditional upon Competition Clearances • Completion of the Disposal is expected in July 2007 Selecta is one of the market leaders in European vending. It has market leadingpositions in many of the 22 countries in which it is present, operatingapproximately 150,000 vending machines in total. In the year ended 30 September 2006, Selecta recorded operating profit beforegoodwill amortisation of £47 million on turnover of £482 million. Gross and Netassets of Selecta at 30 September 2006 were £682 million and £529 millionrespectively. The senior management team of Selecta, including Justin Tydeman (CEO), MartinSchwab (CFO) and Thomas Nussbaumer (COO), will transfer with the business.Compass will provide certain transitional services, including purchasing, for aperiod of 12 - 24 months. The Disposal Agreement contains warranties and indemnities which are usual for atransaction of this nature. Richard Cousins, Group Chief Executive of Compass, commented: "Following a successful auction process, we are pleased to announce the sale ofSelecta for a total of £772.5 million. We will return a further £500 million toshareholders over the next 12-18 months, thereby extending the existing sharebuy-back programme to a total of £1 billion. This is a good outcome for Compass,further helping to focus on our core contract catering and support servicesbusiness. For Selecta, we wish the new owners and all of the staff well for thefuture." Joerg Baldauf, Managing Director of ACP, commented: "ACP is delighted with the successful conclusion of the transaction withCompass. We look forward to working closely with Selecta's management to developits excellent position as the leading European vending operator and pursue itsstrong prospects for further growth." Enquiries: Compass Group PLC Investors / analysts Andrew Martin Tel: +44 (0)1932 573 000Media Chris King Tel: +44 (0)1932 573 000 Citigroup Simon Lindsay Tel: +44 (0)207 986 4000 Allianz Capital Partners Petra Kruell Tel: +49 (0) 89 3800 2628 Merrill Lynch Charles Roast Tel: +44 (0)207 628 1000 Citigroup Global Markets Limited is acting for Compass and no one else inconnection with the matters described in this announcement, and will not beresponsible to anyone other than Compass for providing the protections affordedto clients of Citigroup Global Markets Limited or for providing advice inrelation to the matters described in this announcement Merrill Lynch International Bank Limited is acting for ACP and no one else inconnection with ACP's acquisition of Selecta as described in this announcement,and will not be responsible to anyone other than ACP for providing theprotections afforded to clients of Merrill Lynch International Bank Limited orfor providing advice in relation to ACP's acquisition of Selecta as described inthis announcement This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Compass Group