Marriott Corp. has agreed to sell its airline catering division Marriott In-Flite Services to an investor group led by the division's senior management for approximately $650 million.
"Total worldwide in-flight services is really not as large a business as other Marriott business such as food and lodging, and therefore growth opportunities were not comparable," said Robert T. Souers, Marriott spokesman, in explaining the sale."Also, in all other business we have direct interface with the end-customer," Souers added. "In-flight Services . . . is a business in which we were not able to capitalize on direct contact with end-customers."
Caterair International, the investor group, is led by Daniel J. Altobello, an executive vice president of Marriott Corp.; Frederic V. Malek, a Washington merchant banker and former Marriott Corp. executive; and several senior managers of the airline catering division.
The agreement was signed Monday. Terms of the transaction were not disclosed, but Souers said Marriott will have a "very minor" ongoing financial interest in the business, which will continue to operate under the Marriott In-Flite Services name.
Sources close to the sale said the price was about $650 million.
Proceeds from the transaction will be used to repay debt, Souers said.