SSP Group, a UK-based operator of food and beverage (F&B) outlets in travel locations, has signed an agreement to acquire Airport Retail Enterprises (ARE) in Australia for an undisclosed sum.
ARE is an airport food and beverage operator with annualised sales of A$200m ($130.5m) from 62 outlets across seven Australian airports.
The transaction is expected to be completed by the end of June 2024, pending regulatory clearance and client consents.
The acquisition will see SSP Group adding a diverse portfolio of local, national, international and chef-inspired brands to its operations. The majority of these are in-house brands.
With an expected average growth of 10% per annum in international passenger air traffic and between 3% and 4% in domestic passenger numbers in Australia between 2023 and 2030, SSP aims to build a stronger operational platform and deliver synergies across the combined business.
The company has been operating in Australia since 2007 and has been operating 40 outlets across seven airports and one train station.
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The latest acquisition expands its footprint to 100 units across 11 of the largest 19 airports in the country.
This includes entering four new airports: Canberra, Gold Coast, Townsville and Mount Isa.
SSP Group CEO Patrick Coveney 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 1,500 colleagues from the ARE business to our team.”
Post-acquisition, SSP anticipates the deal to be immediately earnings-accretive.
However, the financial contribution will be balanced against initial integration costs.
In January 2024, SSP America, part of SSP Group, secured a contract for six new dining outlets at Cincinnati/Northern Kentucky International Airport.