Dufry strikes a deal to buy the Nuance Group

Dufry strikes a deal to buy The Nuance GroupBy Justin Burns,

The Dufry Group has signed an agreement to acquire 100% of The Nuance Group, which it says will make it the leader in the airport retail industry with a worldwide market share of 15%.

The CHF 1.55bn ($1.73bn) deal on a debt and cash-free basis, gives Dufry a presence in five continents, 63 countries, 239 airports and around 1,750 shops.

By making the acquisition, the Swiss firm says it will create ‘significant value and enhancing its global leadership in travel retail’, and it will reinforce its presence in Asia, Mediterranean, North and Central Europe and North America.

Nuance is the world’s sixth largest duty free and travel retail group by sales volume operating across 66 store locations in 19 countries, with more than 350 duty free and tax free stores, brand boutiques and concept stores.

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A Nuance duty free store at St Petersburg-Pulkovo

Dufry will hold an extraordinary general meeting on June 26 2014 before which the definite terms of the capital increase will be determined.

The first trading day of the new registered shares is expected to be on July 9 2014, and the transaction is expected to close in the third quarter of 2014.

Julian Diaz, Dufry’s CEO, explains it is a transformational step in the development of Dufry: “The acquisition of The Nuance Group by Dufry is a transformational deal not only for Dufry but also for the travel retail industry.

“This acquisition is a continuation of the global diversification strategy which we have communicated and executed for many years and that is based on profitable growth through three main pillars: like-for-like growth, new concessions and acquisitions.

“Dufry has been a key player in the consolidation of the fragmented travel retail industry and we have been delivering significant value through acquisitions.

“We have been consistently delivering synergies and diversified our concession portfolio worldwide step by step, thus avoiding concentration risk for any specific region or location.

“With this transformational transaction, we make another big step forward in this respect and bring our global scope to a new level. Also, the scale and breadth of our business will be changing the scope of the travel retail industry going forward.

“The combination of both organizations will further strengthen our current concession portfolio, adding new countries and operations that have a very strong fit with Dufry’s regional strategy.”

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Dufry says it expects synergies at Nuance level to be generated starting in 2015, with a full impact of CHF 70 million ($78m) starting in the financial year 2016.

Additionally, it sees further synergy potential of the transaction for Dufry’s existing operations, in terms of gross margin improvement and economies of scale in logistics.

Diaz adds: “We have already prepared an integration plan with the core of this plan being the transition of Nuance’s operations into Dufry’s business model, and we will work closely with the local teams to ensure that we capture the best of the Nuance and Dufry worlds.

Sourced by Airport World

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