French food and facilities management giant Sodexo has signed an agreement to acquire Bangalore-based Radhakrishna Hospitality Services Group (RKHS). Media reports suggest the value of the deal at $100 million or Rs 520 crore. The deal was signed on Tuesday, and the transaction is expected to be closed before the summer of 2009.
RKHS, founded in 1966, is one of the leading providers of food and facilities management services in India. It's present in 22 states and employs 20,000 people across more than 1,000 sites. For fiscal year ended March 31, 2008, RKHS generated revenues worth $89 million or $458 crore.
Sodexo, founded in 1966 by Pierre Bellon, is a world leader in food and facilities management services, with more than 355,000 employees on 30,600 sites in 80 countries. For fiscal year ended August 31, 2008, Sodexo had revenues of 13.6 billion Euro. Listed on Euronext Paris, the Group’s current market capitalisation is 5.3 billion Euro.
The acquisition of RKHS gives Sodexo an edge over other large global players like Compass and Aramak in their push to one of the fastest growing emerging markets. Sodexo has been present in india for the last 10 years.
Apparently the organised players only account for 15% of the catering and facilities management market leaving a large market up for grabs.
Post acquisition, both the companies will combine their extsing operations. Raju Shete, the current chairman of RKHS, will become non-executive Chairman of the combined entity.
The Economic Times reported that the deal includes only the food catering and facilities management business of RKHS. The group has subsidiaries like Radhakrishna Foodland, which is into food service distribution, and .