Bain Capital is looking to bid for a stake in the benefits and rewards services unit of French food caterer Sodexo as the Paris-listed firm is on the lookout for investors that could help fund the group's turnaround, sources told Reuters.
Sodexo, which has a market value of €12 billion ($13.7 billion), is looking to sell a minority stake of about 30% in the business which has been driving the group's post-COVID recovery by providing employee benefit programmes as well as meal vouchers and gift cards, one of the sources said, speaking on condition of anonymity.
An auction process is due to start this week, with other private equity firms expected to join the race, the source said.
Organic Revenues Increase
Sodexo's benefits unit delivered a 7% jump in organic revenues in its latest quarterly results. Its valuation could exceed €2 billion, based on core earnings of about 200 million euros, the source said.
A spokesperson for Sodexo said the company would keep majority control of the benefits and rewards business, adding "in this context we are currently studying various strategic options."
The spokesman also ruled out plans for an initial public offering (IPO).
Bain was not immediately available to comment.
Sodexo, one of the world's biggest catering companies alongside Britain's Compass, has been hit hard by the pandemic and had to cut jobs and halt dividend payments to stay afloat.
Unlike restaurants, caterers like Sodexo – which serves businesses, government agencies, hospitals, schools and event organisers – don't have a direct relationship with consumers and have been unable to focus on home deliveries during lockdowns.
Possible Return To Remote Working
On 6 January Sodexo, founded in 1966 by French billionaire Pierre Bellon, warned a prolonged return to remote working caused by the Omicron variant would affect its revenue.
The Bellon family, which holds a 42.8% stake in the company, has given the green light to the carve-out of the benefits division, which also provides fuel cards, incentive programmes and sports passes.
Valeo Foods Group Acquisition
On 10 May 2021, Bain Capital announced it had signed a definitive agreement with CapVest to acquire Valeo Foods Group.
As a fast-growing consolidator in the food sector, the Pan European food business has expanded rapidly and grown annual net sales to approximately €1.1 billion for the 12 months through to March 2021, from less than €200 million in 2010, the company said.
Established in 2010, today Valeo serves 106 markets globally, produces more than 400,000 tonnes annually across its 24 manufacturing facilities, and employs more than 4,000 people.