SSP Group has agreed to acquire 100% of the shares of Airport Retail Enterprises (ARE) in Australia.
Founded in 1971, ARE is a privately-owned airport F&B operator, with annualized sales in the region of A$200m (US$215m) 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 portfolio of local, national, international and chef-inspired brands, the majority of which are in-house brands. According to the companies, 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 with SSP’s strategy of accelerating growth in the Asia-Pacific region and will see the group increase its presence in Australia. From 2023 to 2030, international passenger air traffic in Australia is expected to grow by an average of 10% pa, with domestic passenger numbers expected to grow by an average of 3-4% pa. The transaction is intended to see SSP add a number of high-quality assets and brands to its portfolio and will further rebalance the group’s weighting toward the high-growth Asia Pacific Air channel. Upon completion, SSP will operate approximately 100 units across 11 of the largest 19 airports in Australia.
The acquisition is expected to be completed by the end of June 2024, subject to receipt of all necessary approvals including regulatory clearance and client consent. After 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.
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 center of excellence. We look forward to welcoming circa 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.”
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