Kerry Group has announced it has entered to entered into exclusive negotiations to sell sweet ingredients portfolio to Advent International-owned IRCA.
The portfolio, which had revenues of €405m and EBITDA of €41m in 2022,
The expected attributable financial results for the year ended 31 December 2022 include revenues of €405m and EBITDA of €41m, consists of sweet and cereal products, primarily serving the end markets of bakery, cereal, confectionery, dairy and ice cream in Europe and the US
The agreed deal, subject to regulatory approvals, will consist of a cash sum of €375m (subject to routine closing adjustments) plus a €125m interest bearing vendor loan note.
Employee consultation and information processes have commenced in relevant jurisdictions, with the deal expected to complete in the first half of 2023.
Edmond Scanlon, CEO of Kerry Group, commented: “We are pleased to have entered exclusive negotiations with IRCA, who have a strong track record of developing their business within the category. This transaction would represent another strategic development in Kerry’s evolution, as we continue to look to enhance and refine our Taste & Nutrition portfolio, aligned to the areas where we can create the most value.”
Massimo Garavaglia, CEO of IRCA, added: “We are delighted to partner with Kerry on this transaction and look forward to its successful conclusion. The Sweet Ingredients Portfolio is a high-quality business with a differentiated set of technologies, and we are excited to welcome their talented team who, we believe, share our passion and drive to deliver the best for their customers and consumers.
“This acquisition would represent a strong fit with our portfolio, with its highly complementary product and technological capabilities, and help us to become a truly global player. We look forward to helping the Sweet Ingredients Portfolio realise its full potential as part of the IRCA family.”
The newly combined business will create a global leader in semi-finished food ingredients with around €1bn in revenues and an international footprint including a significant presence in the US. It would further strengthen IRCA’s leadership positioning and expand its broad assortment of high value-added ingredients.
The deal represents IRCA’s third acquisition since it was acquired by Advent International in July 2022, having already bought Anastasi Group, an Italian pistachio ingredients company, and of Cesarin, an artisanal fruit-based ingredients company.
For Kerry, the proceeds from the potential sale are expected to be used for general corporate purposes and the continued strategic development of the taste & nutrition business.
Kerry itself has made a number of recent acquisitions to build out its focus on taste & nutrition, including Spanish biotech company BioSearch , US botanical extract company Natreon and food production and preservation specialist Niacet.