Food service oriented: Kerry acquires two US-based companies for US$367 million
17 Dec 2018 --- Kerry Group has acquired two US businesses, Ariake USA, the North American business of Ariake Japan Co, and Southeastern Mills’ North American coatings and seasonings business (SEM) for approximately €325 million (US$367.7 million), in a bid to strengthen its food service positioning.
Ariake USA produces clean-label taste solutions derived from poultry, pork and vegetables at its facility in Harrisonburg, Virginia, US. According to Kerry, “the firm’s extraction technologies and development capabilities produce a suite of tailored solutions across a number of end-use markets.”
The acquisition enhances Kerry’s authentic taste and clean-label portfolio, reports the company, and is subject to regulatory approval and customary closing conditions.
SEM manufactures coatings and seasonings at its base in Rome, Georgia, US.
Kerry says the purchase of SEM supports the company’s taste portfolio and further develops its offering in the meat end-use market.
The acquisitions have annualized proforma third-party revenues of approximately €125 million (US$141.4 million). The group will finance both purchases from existing lines of credit.
In company accounts filed last month, Kerry noted that business volumes rose by 3.5 percent in the first nine months of the year, as it reaffirmed its full-year earnings per share growth of 7 to 10 percent.
In the nine months leading to 30 September, business volumes at Kerry, which produces brands including Dairygold, rose by 3.5 percent, with a 4.1 percent jump in the Taste and Nutrition division, and a 1.2 percent increase in the group’s Consumer Foods division, reports the company. Revenues rose by 2.2 percent.
Pricing fell by 0.2 percent, reflecting lower raw material prices on average across the period, but Kerry said the group trading margin was maintained.
In October, Kerry reached an agreement to acquire Fleischmann’s Vinegar Company Inc and AATCO Food Industries LLC. With these acquisitions, Kerry reported it is seeking to further expand the group’s foundational technology portfolio, as well as strengthen its food service and developing market positioning, in line with its strategic growth priorities. The total consideration for the acquisitions was around €365 million (US$416.6 million).
Earlier this month, Kerry signed a licensing agreement with Renaissance BioScience Corp to supply the latter’s Acryleast, a non-GMO acrylamide-reducing yeast enzyme, to food and beverage manufacturers, expected to commence in the first quarter of 2019.
