USA. In big breaking news, highly respected US airport food & beverage services provider OTG announced today it is working with a private investor consortium (the ‘Investor Consortium’) to effect a transaction under which the consortium will acquire OTG.
The Investor Consortium is led by funds managed by Oaktree Capital Management and Centerbridge Partners and includes Sculptor Capital, CPPIB Credit Investments III and Oak Hill Advisors.
The acquisition is part of a series of initiatives to position the business for long-term growth and stability, OTG said.
At closing of the transaction, the Investor Consortium intends to name Tom Fricke – HMSHost CEO from 2012 to 2014 – as Chairman of the Board of Directors and interim CEO.
Fricke has over 30 years’ experience leading transformational change at businesses in the consumer products and retail sectors.
OTG Founder Rick Blatstein has stepped down from his role as CEO, and in the interim, OTG will be led by Fricke and the existing management team, including Scott Little, Chief Financial Officer, Christopher Redd, General Counsel, and Jim Mesterharm, who has been appointed Chief Transition Officer.
Rick Blatstein stated: “I’d like to thank all of the dedicated Crew members of OTG, suppliers, business partners, airlines, airport authorities and everyone who helped the company become what it is today. I look forward to seeing what OTG does next.”
OTG locationsToronto Pearson International Airport Chicago O’Hare International Airport Denver International Airport Houston George Bush Intercontinental Airport New York John F. Kennedy International Airport New York LaGuardia Airport Minneapolis–Saint Paul International Airport Newark Liberty International Airport Melbourne Orlando International Airport Philadelphia International Airport Ronald Reagan Washington National Airport Source: OTG website |
Speaking to The Moodie Davitt Report after the announcement today, Blatstein said: “It was the right time for me and my family to make this change.” He said there are a number of reasons behind the move and its timing now, but could not comment in further detail.
Blatstein reflected on how he had entered the business in 1996. The beginning of the journey coincided with a blizzard at Philadelphia Airport, when he and colleagues supplied food to stranded travellers.
“An old school friend pushed me into starting in the airport environment when I knew nothing about it at the time. But I was soon hooked by the airport world and by the possibilities of creating great experiences for people in it.
“I am very proud of the progression OTG has made since then. Our principles have been based all that time on putting our customers first, and that includes travellers, employees and business partners.”
Blatstein paid fulsome tribute to the OTG “family” and the many people that had assisted the company in its 28-year journey with their “talent and passion”.
He also saluted the airlines and airports that have partnered with OTG down the years, among them United Airlines, Delta, JetBlue, American Airlines, the Philadelphia Department of Aviation, the Port Authority of New York & New Jersey, and commercial teams at New York JFK, Newark, New York LaGuardia, Orlando, Denver, Chicago O’Hare, Houston Intercontinental, Minneapolis-St. Paul, Ronald Reagan Washington National Airport and Vancouver airports.
“We have worked with so many companies to create something special, companies that trusted us to think differently and creatively,” he said.
Reflecting on the industry today, Blatstein said that airport dining was in a “good state of health”. He noted: “We have played our part in upgrading the experience but I believe the best is yet to come. We are honoured to have been part of this industry for so long.”
On the next steps personally and professionally for his family, including his children Justin and Samantha who have served OTG for many years, he said, “Stay tuned.”
The Investor Consortium that takes over OTG has extensive experience managing companies across the transportation, aviation, hospitality, and infrastructure markets, including airports in North America and Europe, as well as decades of experience investing in hospitality, ports, railroads and food & beverage.
The Consortium is also supported by advisors including Dave Barger, Co-Founder and former CEO of JetBlue; Declan Collier, former CEO of Dublin Airport Authority and London City Airport; and Anthony Coscia, former Chairman of the Board of Commissioners of the Port Authority of New York and New Jersey.
To help advance the company’s growth plan, the Investor Consortium will provide it with new financing to support continued innovation, airport infrastructure investment and geographic expansion.
The Investor Consortium first partnered with OTG in October 2021 to provide OTG with capital to fuel its growth.
“We believe in the long-term success of OTG and given our group’s significant resources and extensive experience investing in the transportation, food & beverage and infrastructure sectors, we are the ideal partner to support the Company in its next phase of growth,” said Emmett McCann, Managing Director and Co-Portfolio Manager of Oaktree’s Transportation Infrastructure business, on behalf of the Investor Consortium.
“OTG represents a critical piece of infrastructure across 11 of the world’s busiest airports, and our group is committed to working closely with the team to expand OTG’s geographic footprint, drive technological innovation and position the business for long-term success.”
“As we emerge from a period of disruption across the aviation industry, now is the opportune moment for OTG to supercharge its strategic plan and transform the business to capitalise on tailwinds across the sector,” said Scott Little.
“The Investor Consortium brings significant resources, new capital investment and experience across transportation and infrastructure, and the group’s continued support of the business underscores their confidence in our growth proposition.
“We look forward to working closely with our investors as we continue elevating the airport dining experience for travellers across North America.”
In an internal note to OTG team members, Rick, Justin and Samantha Blatstein said: “When this company started 28 years ago, we never could imagine it would be this great.
“Now, after nearly three decades filled with the most incredible, thrilling, and transformative experiences, the time has come for Justin, Samantha, and me to step down from our roles at OTG and begin a new chapter.
“As we move forward, we do so with the confidence that OTG is in the most capable hands. The talent, drive, and passion within this company assure us that the best days have yet to come.” ✈
About OTG
OTG develops and operates restaurants, retail markets and food halls in airports throughout North America. It runs more than 350 locations across 22 terminals in 11 of the world’s busiest travel hubs. Founded in Philadelphia in 1996, OTG serves hundreds of millions of passengers annually. For more information, visit www.otgexp.com.
About Oaktree
Oaktree is a leader among global investment managers specialising in alternative investments, with US$183 billion in assets under management. The firm emphasises an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities.
Oaktree has over 1,200 employees and 21 offices worldwide. See http://www.oaktreecapital.com/.
About Centerbridge Partners
Centerbridge Partners is a private investment management firm employing a flexible approach across investment disciplines – Private Equity, Private Credit and Real Estate – to develop attractive opportunities for its investors. The firm was founded in 2005 and has approximately US$38 billion in capital under management with offices in New York and London. For more information, please visit www.centerbridge.com
About Sculptor
Sculptor is a leading global alternative asset manager and a specialist in opportunistic investing. With offices in New York, London and Hong Kong, Sculptor invests across credit, real estate and multi-strategy platforms in all major geographies. Sculptor has around US$32.8 billion in assets under management.
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments) is a professional investment management organisation that manages the Fund in the best interest of the more than 21 million contributors and beneficiaries of the Canada Pension Plan.
Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan, At 30 September 2023, the Fund totalled C$576 billion. For more information visit www.cppinvestments.com.
About OHA
Oak Hill Advisors (OHA) is a leading global credit-focused alternative asset manager with over 30 years of investment experience. OHA works with institutions and individuals and seeks to deliver a consistent track record of risk-adjusted returns with downside focus.
The firm manages around US$63 billion of capital across credit strategies in commingled funds, collateralised loan obligations and single investor mandates as of 30 September. For more information, please visit oakhilladvisors.com.
