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RNS Number : 0000N
SSP Group PLC
20 October 2016
20 October 2016
SSP enters the Indian travel food and beverage market, creating
a joint venture with K Hospitality Group
SSP Group plc(1) , a leading operator of food and beverage
outlets in travel locations worldwide, has agreed to create a joint
venture, whereby SSP will own a 49% stake in Travel Food Services
Private Limited ("TFS"), a leading operator of food and beverage
concessions in travel locations in India. SSP will acquire shares
from the Kapur Family Trust, SNVK Properties Private Limited and
KAPCO Caterers, part of the K Hospitality Group(2) and subscribe
for new shares in TFS(3) . K Hospitality operates a broad range of
food and beverage outlets across India.
TFS operates food and beverage outlets in travel locations, with
approximately 170 units in India including at six major airports in
both domestic and international terminals and in railway stations.
It also runs a number of airport lounges. In addition to these
contracts, it operates food and beverage outlets at Muscat Airport
in Oman. Its brand portfolio includes a number of strong in-house
concepts as well as leading third party brands such as KFC, Krispy
Kreme, Pizza Hut and Coffee Bean and Tea Leaf.
SSP is acquiring 49% of TFS for an expected net(4) consideration
of GBP57.9 million(5) . The acquisition will take place in two
stages. The first stage is to acquire a 33% stake for an estimated
net consideration of GBP39.0 million. This stage is expected to be
fully completed by the end of February 2017. The second stage, to
acquire a further 16%, is expected to take place by the end of
2018, for a net consideration of approximately GBP18.9 million,
contingent upon the performance of the business. The consideration
will be satisfied out of existing debt facilities. The transaction
is expected to be earnings enhancing in the first full year of
operation and to exceed SSP's cost of capital by the third full
year following the first stage of the acquisition.
TFS' revenue was GBP41.7 million and EBITDA(6) was GBP8.3
million for the year ended 31 March 2016. In the year ending 31
March 2017, TFS will benefit from the first time inclusion of the
recent buyout of certain joint venture partners, the full
contribution of new units opened in 2016 and on-going like for like
sales growth. Taken together, these items are expected to add
approximately GBP3.0 million to EBITDA in the year ending 31 March
2017. As at 31 March 2016, the gross assets of TFS were GBP25.6
million. Completion of this acquisition is subject to a number of
conditions, consents and approvals.
Commenting on the deal, Kate Swann, CEO of SSP said; "This
partnership is in line with the strategy we set out at our IPO. We
have been looking for the right entry point into this exciting
growth market and are delighted to have found an excellent partner
in TFS. TFS brings a well-established business with a strong
portfolio of brands. The combination of SSP's international
expertise in the travel sector and TFS' strong local presence will
provide an excellent platform for future growth in the Indian
market."
Sunil Kapur, Chairman, K Hospitality Group said; "We are
delighted to be partnering with SSP. SSP's international experience
and proven track record, coupled with our knowledge and position in
the region, means that we have a winning partnership to create a
strong proposition for growth."
Notes:
(1) The acquisition is being carried out through a wholly owned
subsidiary of SSP Group plc, SSP Asia Pacific Holdings Ltd.
(2) Sunil Kapur, Varun Kapur and Karan Kapur have agreed to
guarantee the obligations of the Kapur shareholders under the joint
venture documentation.
(3) Approximately 82% of the shares acquired by SSP Asia Pacific
Holdings Ltd will be existing shares purchased from the Kapur
Family Trust, SNVK Properties Private Limited and KAPCO Caterers
("Kapur Shareholders"). The remaining 18% will be newly issued
shares in TFS subscribed for by SSP Asia Pacific Holdings Ltd. The
new issue shares will all be issued as part of the first stage.
(4) The net consideration represents the estimated total
consideration, net of SSP's cGBP5.5 million share of the net cash
in the joint venture.
(5) The expected net consideration of GBP57.9 million is
contingent on the performance of the business and is subject to a
cap of an additional GBP3.5 million.
(6) SSP will consolidate TFS and its group companies. The
revenue of GBP41.7 million and EBITDA of GBP8.3 million in FY 2016
represent the proportionate consolidation of the TFS Group
including its share of revenue and profit from its joint ventures.
SSP's share of the proportionately consolidated revenue and profit
will be 33%. For accounting purposes SSP will fully consolidate TFS
and its group companies (including its joint ventures). The
comparable share of the fully consolidated revenue and profit is
expected to be approximately 27%. Following the completion of the
second stage, to acquire a further 16%, SSP's share of the
proportionately consolidated revenue and profit will be 49%. The
comparable share of the fully consolidated revenue and profit is
expected to be approximately 43%.
(7) All figures are based on an exchange rate of Indian Rupees to Sterling of 81.9.
Further information:
Sarah John
Investor Relations Director SSP
+ 44 (0)7736 089218
sarah.john@ssp-intl.com
Clare Williams
Templemere PR
+44 (0)1306 735574
clare@templemerepr.co.uk
Business and Financial media:
Peter Ogden / Lisa Kavanagh
Powerscourt
+44 (0)20 7250 1446
ssp@powerscourt-group.com
NOTES TO EDITORS
About SSP
SSP is a leading operator of food and beverage concessions in
travel locations, operating restaurants, bars, cafés, food courts,
lounges and convenience stores in airports, train stations,
motorway service stations and other leisure locations. With over 50
years of experience, today we have nearly 30,000 employees, serving
approximately a million customers every day. We have business at
approximately 130 airports and 290 rail stations, and operate
approximately 2,000 units in over 30 countries around the
world.
SSP operates an extensive portfolio of approximately 400
international, national, and local brands. Among these are local
heroes such as MASH in Copenhagen, James Martin Kitchen in London,
and Hung's Delicacies in Hong Kong. Our range also includes
proprietary brands created for the travel sector including Upper
Crust, Le Grand Comptoir and Ritazza, as well as international
names such as Burger King, Starbucks and YO! Sushi. We also create
stunning bespoke concepts such as Junction Urban Street Food in
London and Walter at Zurich.
www.foodtravelexperts.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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