Reston Airline Catering Firm To Buy Dutch Utensil Supplier

Gate Gourmet, an airline catering company, announced yesterday that it would acquire deSter Holding of Amsterdam, one of the world's largest suppliers of cutlery, chinaware and amenity kits for passengers.

David N. Siegel, chairman and chief executive for Gate Gourmet, said the acquisition was part of a strategy to broaden the range of products the Reston company can offer airlines.

"We are building a best-in-class portfolio that offers the full array of inflight products and services to our customers, and the addition of deSter will propel Gate Gourmet forward," Siegel said in a statement.

Gate Gourmet is a private company that operates in 26 countries on five continents and delivers meals to about 250 airlines daily.

The company commands about 24 percent of the global catering market, according to the Standard & Poor's credit-rating agency, competing with Lufthansa Airline's LSG Sky Chefs and numerous smaller operators.

Gate Gourmet did not disclose the acquisition price. The deal is subject to approval by European regulatory authorities. Gate Gourmet said it expects the deal to close in late August, said spokesman John Bronson.

Representatives in Europe for deSter could not be reached for comment. The company has been owned by the private-equity firm EQT since 1999.

"The industrial logic in Gate Gourmet acquiring deSter is very clear," Thomas von Koch, senior partner of EQT Partners, said in a statement. "Gate Gourmet and deSter complement each other very well and the new owner has the knowledge and resources to continue growing the business."

Siegel, a corporate turnaround specialist who once headed US Airways, has overseen what, at times, has been a contentious restructuring of the company.

A labor dispute with a union that represents the company in London led to a sympathy strike by British Airways workers that grounded hundreds of flights at Heathrow Airport in the summer of 2005.

Gate Gourmet was bought from the Swissair Group in 2002 by the Texas Pacific Group, a private-equity firm. Texas Pacific Group has since divested, selling off the last of its holdings to Merrill Lynch in March.

The company, with headquarters in Reston and Zurich, said it had revenue of about $2 billion in 2006.

"By merging two companies with similar businesses, they are going for mass to compete with LSG, among others," said Douglas Abbey, an analyst with the Velocity Group, a Washington aviation-consulting company.

The acquisition is a foray into what is likely to be a business with higher margins, added Aaron J. Gellman, a professor at Northwestern's Kellogg School of Management.

"At the margins, selling food to the airlines is very low profit," he said.