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Gardner ties the knot with Sodexho

Tom Stevenson
Sunday 22 January 1995 19:02 EST
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Gardner Merchant and Sodexho of France have agreed the terms of an alliance that will create the world's largest contract catering business. Their joint portfolio of contracts will include the Bateaux Parisiens on the Seine, Wimbledon, Royal Asco t and the Sydney Opera House.

Sodexho is paying £543m in cash for Gardner, a management buyout from Forte, which still owns 24 per cent of the company, and will take on £173m of the company's debt. The new business will have annual sales of £2.5bn and employ 110,000 staff in 60 countries.

Sodexho, listed on the Paris stock exchange since 1983, said it would part-finance the acquisition with a Fr1.1bn (£135m) share issue, with the rest coming from borrowings and existing cash resources.

Following the merger, Garry Hawkes, Gardner's chief executive, will also take on the role of chairman and join the Sodexho board as joint director general. He said: "Gardner Merchant chose to join forces with Sodexho after nearly two years of consideringa wide range of alternatives." The company had previously rejected advances from Granada and Compass.

Gardner Merchant was acquired from Forte in a £400m buyout in 1992, backed by CinVEN, the venture capital arm of the British Coal pension fund. Forte will have raised a total of £477m from the two deals.

The most recent approach from Granada was last August when an offer thought to be broadly similar to Sodexho's bid was made. But Garry Hawkes and his colleagues did not then want to lose control.

Gardner and Sodexho provide catering services to firms, schools and universities.

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