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Hilton Food Group is making its first foray into North America with acquisition of international smoked salmon producer Dutch Seafood Company, trading as Foppen.
Hitlon said the deal, for an enterprise value €90m, will expand its presence in a growing protein category, as well as entering the US, a new geography for the group.
Hilton has also today launched an equity placing to raise gross proceeds of approximately £75 million to part fund the acquisition.
The announcement follows the recent full acquisition of Dalco, a vegan and vegetarian food manufacturer, the acquisition of Fairfax Meadow, as well as Hilton’s expansion into Hilton Seafood, together with several years of sustained growth in seafood and plant-based foods by the business.
Hilton said Foppen is an attractive business which is highly complementary to its existing business.
Foppen is focused on added value speciality smoked salmon products (e.g. toast salmon) which offer a differentiated portfolio of products, while smoked salmon itself diversifies Hilton into a protein category with a strong growth outlook.
Foppen is expected to significantly enhance Hilton’s customer base through a number of new customers in the US, a new strategic market, the development of an important existing customer relationship (Albert Heijn in the Netherlands) and significant cross-selling opportunities to both Hilton and Foppen’s existing international customer bases.
The acquisition will also significantly expand the scale of Hilton’s seafood business with potential to deliver procurement and other savings.
Included in the deal are two well-invested, dedicated smoked salmon facilities in Harderwijk, the Netherlands and Preveza, Greece.
Foppen’s financial year ended 31 March 2021 saw revenues of €139.7m and adjusted underlying EBITDA of €10m.
The transaction will be funded through an equity placing of approximately £75 million, that will predominantly fund the Foppen acquisition and partially refinance the previously announced acquisition of Fairfax Meadow.
The new shares will represent an increase of approximately 8% of the current issued ordinary share capital of the Company, as announced separately.
The transaction is expected to enahnce Hilton’s earnings in the first twelve months.
Hilton’s CEO, Philip Heffer, commented: “The acquisition of Foppen is an exceptional opportunity for Hilton and another step towards our goal of becoming the global protein partner of choice. More and more consumers around the world are seeking affordable, high quality, and sustainable protein, and this acquisition will help Hilton take our offer into new markets and to new global customers for the first time.
“Foppen’s premium product portfolio and strong customer relationships are a great fit for Hilton’s model, while Hilton’s strong ESG credentials in seafood will make sure our future growth plans are sustainable in every sense of the word. We welcome Foppen’s management and employees and look forward to delivering profitable growth through the combination of Hilton and Foppen.”
Andre van der Padt, Foppen CEO, added: “We are excited by the future prospects of Foppen under Hilton’s ownership and look forward to working with Philip and team. Foppen’s offer to customers, suppliers and employees will be enhanced as part of Hilton Food Group.”
Hilton shares have opened up 0.3% to 1,200p.
Morning update
Grocery and retail giant Associated British Foods has issued a trading update ahead of its annual general meeting later today.
At the meeting the Chairman, Michael McLintock, will say trading to date in our new financial year across Grocery, Sugar, Ingredients and Agriculture has been in line with expectations.
The group is experiencing the impact of port congestion and road freight limitations and our businesses “have been working hard to overcome these difficulties”.
“We have seen an escalation in the cost of energy, logistics and commodities and we have been implementing plans to offset these through operational cost savings and, where necessary, the implementation of price increases.”
Primark trading year to date has been ahead of expectations with improved like-for-like sales compared to the fourth quarter of our last financial year.
The group is managing supply chain disruption by prioritising products most in demand and has stock cover on the vast majority of lines for the important Christmas trading period.
Public health measures taken to cope with the increase of COVID-19 cases in recent weeks are mainly restrictions in trading hours in the Netherlands, the requirement for vaccine passes in Germany and the closure of our five stores in Austria.
However, Primark margin year to date has been ahead of expectations.
“Looking ahead we currently expect Primark sales to be significantly better than sales in the comparable period in the last financial year, from December 2020 to April 2021, when the estate was largely closed,” McLintock will say.
Since the year end Primark has opened two new stores, one in Vigo, Spain, and one in Catania, Italy, bringing its total estate to a milestone of 400 stores, trading from 17.0 million sq ft.
“Taking these factors into account, we continue to expect significant progress, at both the half and full year, in adjusted operating profit and adjusted earnings per share for the group.”
On the markets this morning, the FTSE 100 has edged back 0.1% to 7,312.4pts so far this morning.
Risers include Bakkavor, up 3.3% to 128.5p, McColl’s Retail Group, up 1.9% to 12.4p and Cranswick, up 1% to 3,688p.
Fallers include Science in Sport, down 2.4% to 62p, Deliveroo, down 1.6% to 233.5p and WH Smith, down 1.3% to 1,414p.
Yesterday in the City
The FTSE 100 ended the day edging back 0.2% to 7,321.2pts yesterday.
DS Smith ended the day up 1.2% to 385.2p after posting strong first half sales and profit growth.
Other risers included Real Good Food, which recovered 14.3% to 2.8p after posting its own annual results. Also on the up were THG, up 8.5% to 197.2p, Nichols, up 3.8% to 1,370p, Kerry Group, up 3.7% to €114.25, B&M European Value Retail, up 2.3% to 664p, PayPoint, up 2.3% to 635p and Hotel Chocolat, up 0.8% to 512p.
The day’s fallers included Bakkavor, down 3.9% to 124.4p, Glanbia, down 3.7% to €11.85, Just Eat Takeaway.com, down 3.2% to 4,350.5p, McBride, down 3.2% to 61p, Domino’s Pizza Group, down 2.6% to 360.4p, Finsbury Food Group, down 1.8% to 96p and C&C Group, down 1.7% to 228.4p.
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