The Hindu Business Line : Sodexo poised to become India’s largest food services player

French food giant Sodexo is poised to become the largest player in the food services industry in the country, after its acquisition of Radhakrishna Hospitality Services Group (RKHS), a pioneer in the food and facilities management sector, on Tuesday.

The deal was valued around $100 million.

Mr Yann Coleou, President, India, and CEO, UK & Ireland, Sodexo, told Business Line in an e-mail response, “After this deal, we will become seven times bigger than the second player in the country.”

The other major players in this industry include ISS Facility Services and Shiva Catering Services. The new entity will function under Sodexo’s ownership, although RKHS promoter, Mr Raju Shete, would take over as the non-executive chairman of the combined entity, said Mr Coleou.

“He will continue to own and manage his food retail business under Radhakrishna Foodland separately,” he added.

Edge over peers

This transaction will give Sodexo a big leap over its international peers Compass and Aramak in major markets such as India.

RKHS has around 20,000 employees across 22 States.

It has more than 1,000 clients, including big corporates such as Essar, Hyundai, Mahindra and Siemens.

RKHS reported around Rs 462 crore of revenues during the financial year ended March 2008, with a 25-30 per cent jump year-on-year.

The organised sector’s penetration in the domestic catering and facilities management market is just around 15 per cent, which throws up opportunities for significant upside in the future.

Sodexo, with annualised revenues of over €13.6 billion, has a presence in over 80 countries.

It has been operating in the domestic market for almost a decade, the meal coupons being the most visible element of its business locally.

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