Cater Compass Group in advanced talks to buy rival CH&Co

(Sharecast News) - Caterer Compass Group is reportedly in advanced talks to take over a rival business which provides hospitality services at landmark venues including Kew Gardens and the Royal Opera House. According to Sky News, Compass was putting the finishing touches at the weekend to a deal worth more than £400m to acquire CH&Co, a private equity-backed company.

If confirmed, it would be Compass's largest acquisition in the UK for years, although the transaction will not be material from a valuation perspective given its market capitalisation of over £37bn.

Based in Reading, CH&Co provides services in sectors including schools, workplaces and tourist destinations.

Among the other prominent venues it counts as clients are the Royal Academy of Arts, the Southbank Centre and the Old Royal Naval College. Historic Royal Palaces, whose portfolio includes the Tower of London and Hampton Court Palace, is also on its books.

CH&Co, which has held a royal warrant since 2013, has been backed by PE firm Equistone since 2019.

One catering industry executive told Sky that at a valuation of more than £400m, the exit would deliver an impressive outcome for Equistone, which has engineered a string of smaller takeovers for CH&Co during its period of ownership.

The sale to Compass will come nearly four years after the FTSE 100 company raised £2bn from shareholders to support it through the pandemic.