Elior grew by borrowing, sold its best division, then got swallowed by a waste firm

Elior Group was founded in 1991 and grew into France's second-largest contract catering company through an aggressive acquisition spree, buying dozens of businesses across Europe and the United States. The strategy was funded mostly by debt, and by 2019 Elior was heavily leveraged.

In July 2019, under pressure from its debt load, Elior sold its most valuable division — Areas, the airport and highway concession business — to PAI Partners for about €1.4 billion. The sale was meant to strengthen the balance sheet, but Areas had been Elior's most profitable and recession-resilient operation.

When COVID-19 hit in 2020, Elior's remaining catering businesses — serving corporate offices, schools, hospitals, and events — were devastated. The company posted a net loss of €483 million for 2019–2020 and cut 1,888 jobs in France. A further loss of €100 million followed in 2020–2021.

In 2022, Derichebourg Group — a French waste management and industrial services company — became Elior's largest shareholder and eventually raised its stake to 48.4% by contributing its own services business. By April 2023, Derichebourg had taken control of Elior, with Daniel Derichebourg becoming Chairman and CEO of the combined entity with over €5 billion in revenue.

The sale bought only two years: proceeds went to debt and losses, leaving no buffer when COVID hit, so a waste firm took control.

Elior's debt-fueled acquisition strategy left the company with no financial buffer — when the pandemic hit, operating losses compounded already-crippling interest payments

Selling Areas in 2019 removed Elior's most profitable and recession-resilient division, leaving only the business lines that COVID would devastate

The €1.4 billion Areas sale bought just two years of breathing room — the proceeds were consumed by debt service and operating losses before a buyer could emerge

Elior's governance structure failed to anticipate the debt risk, and the board had no credible recovery plan beyond selling assets and hoping for a turnaround

Selling your most resilient business to pay down debt from buying everything else means the company that survives is not the one you wanted to keep.