Compass, which provides meals for office workers, armed forces and school children in more than 50 countries, has in the past year been cutting costs and focusing on its food business, while reducing non-core operations.
"This is a very attractive acquisition for Compass Group which already has a presence in the region," Compass said in a statement.
"The transaction is expected to achieve the company's acquisition criteria of returns greater than the cost of capital by the end of year two," it said.
Finland-based Fazer Food Services employs 7,000 employees at more than 1,000 sites in Finland, Sweden, Norway, Denmark, and Estonia.
Compass will pay 420 million euros in cash with the rest of the acquisition payment payable within seven years dependent on closing balance sheet adjustments and the operation of an earn-out.
Compass shares were down 0.9% on Tuesday after gaining 16% in the past 12 months.
"Compass is already present in the region which should be helpful for cost synergies," analysts at Jefferies said in a note. "The asset appears to be sub-scale at present and may have been a slightly neglected non-core element of a larger FMCG group."
Fazer Food Services generated turnover of 593 million euros and EBITDA of 39.8 million in the 12 months that ended in April.
After the deal is approved by regulators Fazer will be a much smaller company focused on its bakery and confectionary business, as Food Services generated 37 percent of its 2018 turnover and employed 45 percent of its staff.
(Reporting by Tarmo Virki in Helsinki and Justin George Varghese in Bengaluru; Editing by Susan Fenton)