Compass, the contract catering group, yesterday snapped up a string of blue-chip corporate clients through the $16m (£10m) purchase of Flik International, a private company based in New York.
Flik was established in the early 1970s by the husband and wife team of Ruby and Julie Flik. It has more than 85 executive dining contracts in and around New York and Boston, including several law firms, Ciba-Geigy, Sterling Drug, Price Waterhouse and Deutsche Bank.
The deal comes almost exactly a year after Compass initially moved into the US contract catering market - which is bigger than the rest of the world market combined - via the $450m acquisition of Canteen Corporation.
While Flik will be bolted on to Canteen's existing executive dining operations, it will retain its own identity. Flik has 1,300 employees, but Compass said there were no plans to make "wholesale cost savings".
There is a high degree of loyalty attached to executive dining contracts. Despite contracts containing three-month notice clauses, the average life is about 10 years.
Flik turned over $45m of business last year, equating to $530,000 per contract. Profits were not disclosed, although Compass said the deal would not dilute earnings.
Compass has an executive activity in the United Kingdom called Roux Fine Dining, which is managed with Albert Roux, the restaurateur.
Results for the six months to the end of March are due from Compass in two weeks. Analysts are looking for pre-tax profits, which will include a full six months' trading from Canteen, to rise by more than one-third to slightly more than £30m.
Compass shares eased 1p to 333p yesterday.Reuse content