Compass Nabs caterer CH&CO for £475 million to expand UK footprint

British food service giant Compass Group (LSE: CPG) will purchase CH&CO Catering Group for an initial £475 million as it seeks to grow its contract and hospitality footprint in the UK and Ireland. Compass shares were unchanged on the news.

The acquisition gives Compass an experienced player in sectors like business, sports, education, and healthcare. CH&CO generates around £450 million in annual revenue. Compass CEO Dominic Blakemore said CH&CO is “highly regarded” and will complement Compass’s existing operations. An additional earn-out may be paid based on CH&CO’s profit growth over two years.

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Compass is using its strong cash flow and balance sheet to “invest in organic growth and acquire high quality businesses,” Blakemore said. The move comes as Compass stock is up 14% over the last year.