Financial News

  • 13 March 2014, 7:17

Roadchef Owner Delek Revs Up 350m Sale Plan

The owner of Roadchef, one of Britain's biggest operators of motorway service stations, is preparing to sell the business for about 350m.

Sky News understands that Delek Group, an Israeli conglomerate with interests in energy, financial services and infrastructure assets, is appointing bankers to oversee an auction of the company.

Roadchef owns 20 motorway service areas including Watford Gap, arguably Britain's best-known refuge for tired and hungry motorists.

In total, the group's portfolio includes more than 20 sites around the UK, two of which are not situated beside motorways.

Delek, which bought Roadchef in 2007, is understood to be keen to take advantage of buoyant financing markets and the recent performance of the business to engineer a sale.

Roadchef's sites include franchise agreements with Costa Coffee, WH Smith, McDonald's and Regus, the serviced offices provider.

Citi, the investment bank, is understood to have been lined up to handle the auction, which will represent the latest of Britain's biggest motorway services operators to change hands.

Accounts filed at Companies House last autumn show Roadchef made a profit of 5.5m on sales of 222.2m in 2012, the most recent period for which figures are available.

In the accounts, it also warned that regulatory restrictions on the construction of new motorway service areas could hinder its growth, but said: "Management believes there are about 42m visits to the Roadchef Group's sites in a year and 68% of these visits result in the visitor being converted to a customer.

"The Roadchef Group's objective is to increase the conversion rate and the amount each customer spends.

"Recent investment in the catering offering at key sites has proven to reduce the level of non-conversion by between 10 and 15%."

Delek bought Roadchef from Nikko Principal Investments and Vision Capital, which had owned a minority stake since 2004, for 375m.

A 295m portfolio of sites owned by Welcome Break, one of the other major roadside services groups, was sold by the tycoon Robert Tchenguiz last year.

Little Chef, which employs 1,100 people, was recently taken over by Kout Food Group, which is the exclusive franchisee in Kuwait for Burger King and Pizza Hut.

A Roadchef spokeswoman declined to comment on Wednesday.

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