Lagardere Travel Retail has announced the signing of an agreement to acquire Paradies from Freeman Spogli & Co., the Paradies family and other shareholders.
The cash deal, expected to close during the fourth quarter, is valued at $530 million.
Lagardere, through its LS Travel Retail North America division, has a strong presence in Canadian airports. It also has stores in some international airports in the U.S., including Los Angeles International (LAX) and John F. Kennedy International (JFK). This deal is aimed, at least in part, toward strengthening that presence, according to a statement released by Lagardere.
Other factors, the statement indicates, include the desire to capitalize on growth opportunities, strengthen its management teams in North America and bring to North America “the same ambition for excellence that it puts into practice in the other regions where it operates, particularly in Europe and the Asia-Pacific region,” the company says.
“This acquisition transforms the presence of Lagardere Travel Retail in North America,” says Dag Rasmussen, chairman and CEO of Lagardere. “It significantly strengthens our business and allows us to expand our concession portfolio and to develop relationships with our brand partners and suppliers. We are very pleased to welcome Gregg Paradies and all his employees to the group. Together, we will aim to create a regional leader and break new ground.”
The acquisition comes at a time when traffic in the U.S. is projected to increase 3 percent per year between 2015 and 2021, and 2 percent during the decade following, company officials say. Paradies has a presence in several of the country’s largest airports, including LAX, Hartsfield-Jackson Atlanta International (ATL), Chicago O’Hare International (ORD), Dallas/Fort Worth International (DFW) and Denver International (DEN).
The duo, company officials say, have a collection of complementary concepts, including a combination of global brands and American local and national concepts. The companies expect to see significant cost synergy potential and they project sales at the newly combined entity to approach $800 million. Paradies itself generated sales of $515 million during the fiscal year ended June 28, according to the statement.
“We at Paradies are very excited to join a company of Lagardere’s reputation and international experience,” says Gregg Paradies, president and CEO of Paradies. “Paradies and Lagardere group share many similarities including our strong family cultures. The combination of resources and experience will help accelerate our growth and competitiveness in this very dynamic industry.”
