Nomad Foods has agreed to acquire Fortenova’s Central and Eastern European-focused frozen food business for a total of €615m.

FFBG is a leading European frozen food portfolio operating in markets new to Nomad, including Croatia, Serbia and Bosnia & Herzegovina, Hungary, Slovenia, Kosovo, North Macedonia and Montenegro.

The group’s two anchor brands, Ledo and Frikom, have “unparalleled consumer awareness” and number one market share in many of these markets, offering a range of frozen food products including fish, fruits, vegetables, ready meals, pastry and ice cream.

Nomad CEO Stéfan Descheemaeker commented: “The acquisition of FFBG reinforces Nomad’s European frozen food leadership while strategically expanding our portfolio into attractive new markets and creating an exciting new category adjacency in ice cream.

“Similar to Nomad, FFBG is singularly focused on frozen food, a fantastic category that is aligned with consumer trends including convenience and sustainability. We plan to leverage our combined pan-European scale, commercial expertise and passion for frozen food while harnessing the unique local characteristics and traditions of FFBG’s brands.”

The acquisition of FFBG aligns with management’s articulated strategy of expanding Nomad’s frozen food portfolio into new geographies, categories and channels.

Management expects FFBG’s organic growth to be in the mid-single digits range, double the 2-3% organic growth profile of Nomad’s existing business.

Nomad sees an opportunity to expand FFBG’s Adjusted EBITDA base by approximately 50%, partly driven by an estimated €15 million of annual run-rate synergies by 2024

Noam Gottesman, Nomad Foods’ co-chairman and founder, added: “We are delighted to announce this acquisition, which is consistent with our growth strategy and builds on our five-year track record of top-tier shareholder value creation.

“This transaction provides a natural extension to our existing business and creates a new platform for future expansion within Central and Eastern Europe. It also introduces us to ice cream, an exciting new category which opens new potential avenues for growth. Following the acquisition, our annual revenue will approach €3 billion, nearly doubling the revenue base of Iglo Group, our initial anchor acquisition in 2015. We are proud of what we have accomplished so far, and we believe there is much more to come. We look forward to welcoming the FFBG team into the Nomad family.”

The purchase price is expected to be funded through cash on hand and debt. T

Morgan Stanley acted as financial advisor and Norton Rose Fulbright, Divjak Topic Bahtijarevic & Krka Law Firm and BDK Advokati are acting as legal advisors to Nomad Foods on the transaction.