Release date -13022024
SSP Group plc ('SSP' or 'the Group'), a leading operator of restaurants, bars, cafes and other food and beverage outlets in travel locations across 36 countries, is pleased to announce it has entered into an agreement to acquire 100% of the shares of Airport Retail Enterprises Pty Ltd ('ARE') in Australia.
Compelling and aligned strategic rationale
Founded in 1971, ARE is a leading, privately-owned airport F&B operator, with annualised sales in the region of AUS$200m (c. GBP100m) from 62 outlets, principally bars, casual dining restaurants and cafes, across seven Australian airports: Sydney, Melbourne, Brisbane, Gold Coast, Canberra, Townsville and Mount Isa. ARE has a diverse portfolio of local, national, international and chef-inspired brands, the majority of which are in-house brands. SSP's acquisition of ARE will provide an opportunity to build a stronger operational platform and deliver synergies across the combined business.
The acquisition of ARE is aligned to SSP's strategy of accelerating growth in the Asia Pacific region and will see the Group enhance its presence in Australia. From 2023 to 2030, international passenger air traffic in Australia is expected to grow by an average of 10% p.a., with domestic passenger numbers expected to grow by an average of 3-4% p.a.1. The transaction will see SSP add a number of high-quality assets and brands to its portfolio and will further rebalance the Group's weighting towards the high-growth Asia Pacific Air channel.
SSP has been present in Australia since 2007 and now operates 40 units across seven airports and one train station. ARE's portfolio is highly complementary to SSP's existing operations, and as a result of the acquisition, SSP will gain entry into four new airports (Canberra, Gold Coast, Townsville and Mount Isa). Post completion, SSP will operate c. 100 units across 11 of the largest 19 airports in Australia.
Delivering attractive shareholder returns
The acquisition is expected to complete by the end of June, subject to receipt of all necessary approvals including regulatory clearance and client consents. Post completion, the acquisition is expected to be immediately earnings accretive, albeit the contribution in the current financial year will be largely offset by initial integration costs.
The transaction represents an effective use of SSP's strong balance sheet, being funded through existing cash and credit facilities.
Commenting on the announcement, Patrick Coveney, CEO of SSP Group, said:
'We are very pleased to have signed an agreement to acquire a high quality and highly complementary business in Australia. The acquisition will increase our portfolio of brands and concepts, give us entry into new prime air locations, enhance our position as a leading airport F&B operator in the country and create significant value for shareholders.
'The Asia Pacific region offers a significant opportunity to build returns and drive growth for the Group. Our enlarged business in Australia will have the opportunity to become a regional centre of excellence. We look forward to welcoming c. 1,500 colleagues from the ARE business to our team.'
Peter Butts, Founder of ARE, added:
'Since 1971, Airport Retail Enterprises ('ARE') has been focused on creating exceptional dining experiences for our customers and, in doing so, has grown to become a leading operator of airport F&B outlets in Australia. This transaction is a major milestone for ARE and we are delighted that it will be joining the SSP Group, one of the leading F&B operators in travel locations globally.
The acquisition will allow the combined business to offer an even wider range of high-quality F&B selections and maintain an unwavering commitment to excellence in the airport environment. I would like to take this opportunity to thank all of our team members who have played such an integral role in growing ARE to the business it is today.'
Notes
Deloitte report November 2023 'The economic and social importance of Australia's airports'
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018 and is being released on behalf of SSP by Fiona Scattergood, Group General Counsel and Company Secretary.
SSP was advised by Mills Oakley, Gilbert + Tobin and Deloitte. ARE was advised by Greenstone Partners, Corrs Chambers Westgarth, Alvarez & Marsal and KPMG.
SSP GROUP PLC 
