SMG GROWS UK F&B PORTFOLIO

Tuesday, February 10, 2015

Earlier this month, SMG announced that it acquired CGC Events Limited (CGC) — a catering company based in Yorkshire, England — to expand its hospitality presence in Europe. The company will pay an undisclosed amount over a number of years.

The acquisition came as somewhat of a surprise.

“We weren’t for sale, but SMG approached us and was willing to work in partnership with us on partnership and catering,” said Darran Coulson, CGC Managing Director. “When we started looking at it, it was clear that it was more beneficial for SMG to take us on.”

CGC benefits from having more capital to go after contracts and expand to more than a predominately summer-based business, while SMG will benefit from the established brand that CGC has grown.

The company has been around for nearly a century. CGC has an annual turnover of about $30 million with 200 full-time staff and more than 1,000 employees during peak events. It is the exclusive caterer at eight racecourses including York Racecourse, as well as providing matchday catering for five soccer and rugby facilities and custom catering services for individual events.

Due to its reputation, CGC will retain its name and branding as opposed to coming under the Savor name, which is SMG’s food and beverage division.

“People recognize and have a relationship with the brand name,” said SMG Europe Exec.VP John Sharkey. By acquiring a European food and beverage company, it will allow quick access to supply and inventory. “It gives us an opportunity to get to market more quickly,” Sharkey added.

CGC will be able to leverage the size, reputation and financial resources of SMG, with the combined European group reporting total revenues of more than $250 million under management and a turnover of about $68 million.

Some larger contracts where we could have been successful, we didn’t get because we’re not big enough — we’re big enough to do the job, but what they want is a certain financial ability and they want to see a multinational business,” said Coulson. “All of a sudden we’ll be able to get a longer term and be able to invest more.”

Acquisition discussions have been going on for about 16 months.  It took time to figure out the company’s cultures and how they would fit together.

“Culturally, we think that both companies focus on the customer, the experience and innovation,” said SMG Exec.VP Maureen Ginty. “That’s what makes any kind of merger really work well — when you put your customers first and have an emphasis on the employees.”

Business at CGC will mostly continue as usual, with current staff continuing to operate the catering company, led by Coulson, who will take on the title of Sr. VP of Operations.

Both companies plan to learn from each other.

“There’s one way of doing things well and that’s the best way; it’s a sharing experience both for CGC and SMG,” said Sharkey. “We’re not so proud as to think that one particular party has the monopoly in doing this well.”

Though previously seen as more of a regional company, CGC is open for business and conversation across the whole of the United Kingdom.

This isn’t the first time that SMG has expanded its food and beverage operations through acquisition. As recently as June, SMG acquired Premier Food Services in San Diego.

“We’re open internationally for all sorts of opportunities and we’ve been blessed with a lot of success and supportive owners,” said Ginty. “If we see things that make sense, we’re going to take a hard look at them.”

 

Interviewed for this story: Darran Coulson, Maureen Ginty and John Sharkey, (610) 729-7900