FRANCE/INTERNATIONAL. Lagardère Travel Retail has completed the acquisition of Belgium-based travel retailer International Duty Free (IDF) in a deal valued at €250 million.
The move to acquire IDF, which also has a presence in Luxembourg and Kenya, was first announced on 25 July. It brings Lagardère Travel Retail’s annual revenue to €5.3 billion.
Lagardère Travel Retail noted that the acquisition would extend its airport duty free presence to Brussels, “an additional leading European hub”, while consolidating its positions in Luxembourg and in Africa with entry into Kenya. The company said it would also seek to “leverage IDF’s experience in the fast-growing Belgian premium chocolate segment to strengthen its operations in this market at the international level”.
“The close affinity between IDF and Lagardère Travel Retail in terms of culture and strategy will help to ensure a successful integration, led by Nicolas Van Brandt as CEO,” Lagardère Travel Retail commented. “The companies’ combined operating and sales expertise will help boost sales and unlock recurring operating synergies.”
IDF revenue for 2019 is expected to be between €185 million and €190 million. The company will be consolidated in Lagardère’s financial statements with effect from 1 October 2019.
The enterprise value of the acquisition is €250 million, based on zero cash and debt. This is around eight times IDF’s pro forma EBITDA for 2020, factoring in €7 million in recurring synergies expected to be unlocked through to 2022.
Lagardère Travel Retail said the acquisition is expected to deliver solid cash generation and be accretive to its recurring EBIT, as well as extending the average life of the group’s concession agreements.
“This value-creating transaction is an important step in Lagardère Travel Retail’s global growth strategy, marking its entry into the duty free space in a further two countries, including Belgium, where it will benefit from a long-standing leadership position and long-term concessions in both of the country’s main airports,” the company concluded.
Speaking about the planned acquisition for the October issue of The Moodie Davitt Report, which will be available at the TFWA World Exhibition in Cannes, Lagardère Travel Retail Chairman & CEO Dag Rasmussen said: “For us it was about IDF’s market presence in Belgium but also the quality of the market presence. With the synergies we can deliver and cross-fertilisation of their excellent management and our knowledge, it [the acquisition] will bring lots of value.”
