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This $248 Million Deal Would Create a New Giant in Airline Catering

December 29, 2016

Servair MacauServair Macau
Employees add mint leaves to fruit salads in Servair center on April 6, 2009 in Macau, China. Lucas Schifres Getty Images

Swiss airline catering company Gategroup Holding (GGRUF) said on Thursday it was buying Air France KLM’s (AFLYY) catering business Servair for 237.5 million euros ($248.31 million), including debt, to create the world’s leading inflight catering group.

After the deal, Gategroup will be serving more than 300 airline customers and expects annual revenue to exceed 4.4 billion Swiss francs ($4.29 billion), the group said in a statement.

The enterprise value of 237.5 million euros is based on a 50% stake in Servair, Gategroup said.

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Air France-KLM said in May it was entering exclusive negotiations with Gategroup’s parent Chinese aviation and shipping conglomerate HNA Group to sell a stake in Servair and transfer operational control to HNA.

Gategroup said it would finance the acquisition initially through a bridge facility which would be replaced by a capital market transaction likely to be in the first half of 2017.

Gategroup said Lazard was acting as its financial adviser on the deal.

HNA Group bought Gategroup in a $1.5 billion deal earlier this year.