After months of speculation, and numerous reports from the Italian press, Lagardère Services can now confirm that it has signed a deal with SAVE S.p.A, establishing a 50/50 ‘industrial partnership and business combination’ concerning Italian F&B and retail subsidiary, Airest.

 

Lagardère Services CEO, Dag Rasmussen, told TRBusiness.com, during an exclusive interview in Paris on Wednesday: “We’re signing a deal in Venice which is duty free and also food and beverage and travel essentials regarding Venice and Treviso airports, plus other things around.

 

[Right: Venice Marco Polo Airport managed by SAVE S.p.A]

 

“It’s a real industrial project because Venice just signed a master plan, like Rome did, which would mean extension in the future so there would be interesting retail planning and extensions and so on.”

 

As previously reported, LS Travel Retail Roma and Aeroporti di Roma recently launched 4,800sq m of modern, expanded stores in a phase one expansion at Rome’s Fiumicino Airport

 

[Above: TRBusiness.com interviewed Dag Rasmussen in Paris on Wednesday]

 

FOOTHOLD IN ITALY

“It works in synergy with our operation in Rome,” adds Rasmussen. “Together these contracts give us a good foothold in Italy.”

 

Airest is a subsidiary of SAVE operating in Food and Beverage and Travel Retail since 2001 with a presence of 216 directly and indirectly managed points of sales in 11 countries.

 

In 2012, the business generated €198 million in sales, 86% of which in Food Services and 14% in Duty Free & Travel Retail, with €11 million of EBITDA and a Net Financial Position of approx. €-47 million.

 

Under the terms of the binding agreement, SAVE will transfer 50% of Airest’s share capital for an amount based on the expected consolidated results and adjusted net financial position of the company at the end of 2013.

 

AIREST GROUP REOGANISATION

According to the present expectation of the 2013 results and in line with valuations of industry peers, Airest has been valued at €110 million on a debt-free, cash-free basis (Enterprise Value).

 

Airest’s net financial position at December 31st, 2013 has been estimated for approx. €57 million.

 

The acquisition agreement, subject to the authorisation of competent regulatory authorities, includes a reorganisation of Airest Group through a de-merger of all Italian and International Activities, other than the Venice Airport System activities, which will be transferred to a newly incorporated joint stock company (“Newco”).

 

After de-merger, both Airest and Newco will be jointly owned by SAVE and by Lagardère Services (50/50). Regarding Newco, the agreement provides for a Put and Call Option (which can be exercised until December 31st, 2016) on SAVE’s 50% stake at a price that shall be equal to approx. €25 million minus 50% of the Net Debt of Newco as of the date of exercise of the Put or the Call Option. The Put and Call price is subject to certain adjustment mechanisms.

 

‘LONG-TERM COMMITMENT’

Regarding Airest, the 50/50 partnership between SAVE and Lagardère Services will remain in place. This combination guarantees a long-term commitment to the joint industrial project of developing together the Venice Airport System activities.

 

The agreement also provides that, after the closing date, the Chairman and a Director will be appointed by SAVE and the Managing Director, along with two others Directors will be appointed by Lagardère Services. Airest will be fully consolidated by Lagardère Services.

 

“This agreement is in line with SAVE’s strategy to strengthen the focus on airport management operations in consideration of the recently signed “Contratto di Programma” that defines a stable set of rules to govern the Venetian airport until the end of concession, on March 2041,” says SAVE.

 

“Through this combination Lagardère Services accelerates its development in Travel Retail – notably in the foodservice business thanks to Airest’s presence in several key airports – and consolidates its Italian Travel Retail operations,” adds LS.

 

VENICE, AN EXTRAORDINARY CITY

“Venice, like Rome is an extraordinary city. This is a 50/50 joint venture with the airport in order to really make this industrial transformation,” adds Rasmussen.

 

“This has been in the pipeline for several years. We started first contacts probably several years ago. It’s important that people know each other and trust in each other so it’s been a long-term process.”

 

SAVE S.p.A. was incorporated in 1987 and has been managing Venice Marco Polo Airport since then. The company – which is involved in airport, retail and F&B management – through its subsidiary, Airest S.p.A, manages all the catering and duty-free activities at Venice Airport.