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Compass clinches $250m IBM deal

Clifford German
Tuesday 03 October 1995 23:02 BST
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Compass Group has snapped up a contract worth $250m to supply restaurant food and vending machines for 100,000 IBM workers at 29 sites across the United States for the next five years.

Compass, which started as a buyout from Grand Met and came to the market less than seven years ago, is now the world's largest food-service company, supplying meals to staff restaurants, schools, hospitals and airports, stocking vending machines in workplaces and operating contracts for the likes of Burger King and Pizza Hut.

The deal is the biggest single food service contract ever awarded in the US and possibly in the world, Compass claimed yesterday.

Mike Bailey, president and chief executive of Canteen Corporation, the US division, said the deal was part of a rapidly developing trend for big US companies to negotiate supply contracts with a single supplier, and would add more than 5 per cent a year to the group's turnover in the US, which acounts for about a quarter of the group's business worldwide.

Although not in quite the same league as the acquisition this summer of Eurest International, a leading hotel caterer, for almost pounds 600m, the deal moved the shares up 17p to 441p yesterday, valuing the group at pounds 1.36bn, up pounds 50m on the day.

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