The merger between Derichebourg Multiservices, a company specialising in the provision of services to companies, and the Elior Group is underway. Derichebourg Multiservices is expected to increase its stake in Elior Group in the coming months. Experts from AURIS Finance, a merger and acquisition consultancy, take a look behind the scenes of this new market movement.
Derichebourg SA’s stake in the Elior Group could soon rise from 24.36% to 48.4%. In May 2022, Derichebourg acquired a stake in the catering specialist. This initial investment was followed by the signing of a memorandum of understanding on 20 December 2022. The merger is expected to take effect in spring 2023, following approval by shareholders, the French Autorité des marchés financiers and the competition authority. The acquisition will be fully paid for by the issue of Elior Group shares to Derichebourg SA.
A change of scale for the Elior Group
This merger marks a turning point in the Elior Group’s shareholder structure. Since its creation in 1991, the French multinational has been independent for a long time. It then placed itself under the control of investment funds before going public in March 2015. It also marks a turning point in the business structure of the Elior Group, which until then was mainly present in the contract catering market, with the multiservice offering representing less than a third of the company’s activity.
From European number three to “international leader.”
This transaction should enable the Elior Group to make a strategic leap forward. In the three months to end-December 2022, Elior’s sales amounted to €1.23 billion, with organic growth of 11.7% year-on-year, benefiting in particular from a catch-up effect following the health crisis. The Elior Group is currently the third largest European player in the sector. The integration with Derichebourg Multiservices will position the new entity as the leading multiservice and contract caterer in France, while accelerating its international presence.
A market in transition
The contract catering and corporate services sectors are undergoing major changes. The merger of the two companies will allow greater “diversification through complementary activities”, according to the group’s institutional communication. Derichebourg Multiservices will thus strengthen the new group’s range of services in the fields of facilities management (energy efficiency, public lighting, cleaning, reception, green areas), security, human resources, temporary employment, and aeronautical subcontracting. With a turnover of €943 million in 2022, Derichebourg Multiservices is distinguished by its strong presence in facility management, which currently represents 70% of the group’s activity.
Synergies and cost savings
The combination of the two companies will position the new group as the leading provider of food services in France. The combined revenues of the two companies will reach €2.4 billion, more than the current market leader, Sodexo, whose revenues are estimated at €2.1 billion for 2021. The transaction will also generate cost synergies estimated at €30 million by the end of the 2026 financial year.
Get the support you need
Mergers can deliver big strategic leaps and significant cost synergies. A period of concentration is underway in the corporate and local government services sector. AURIS Finance has a team dedicated to this sector and will assist you throughout your sale and acquisition process.
