Kerry poised to sell Sweet Ingredients portfolio to Advent International’s IRCA
12 Jan 2023 --- Kerry Group has entered into exclusive negotiations to sell the trade and assets of its Sweet Ingredients Portfolio to IRCA, a global key player in chocolate, creams, and other high-quality semi-finished food ingredients, for a consideration of €500 million (US$538 million).
The combination of IRCA and Kerry’s Sweet Ingredients Portfolio is expected to create a global leader in semi-finished food ingredients with around €1 billion (US$1 billion) in revenues, an international footprint and a significant presence in the US.
It would further strengthen IRCA’s leadership positioning and expand its broad assortment of high-value-added ingredients.
Kerry says the Sweet Ingredients Portfolio is a leading manufacturer of sweet and cereal products with a wide range of technological capabilities, primarily serving the end markets of bakery, cereal, confectionery, dairy and ice cream in Europe (UK, the Netherlands, Germany and France), and the US (Illinois, Kansas, Missouri, and California).
The portfolio incorporates a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées.
The consideration of €500 million (US$538 million) comprises an initial cash consideration of €375 million (US$403.5 million) plus a €125 million (US$134.5 million) interest-bearing vendor loan note.
“Strong track record”
The expected attributable financial results for the year ended 31 December 2022 include revenues of €405 million (US$436 million) and EBITDA of €41 million (US$44 million).
The portfolio incorporates a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées.“We are pleased to have entered exclusive negotiations with IRCA, with 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,” says Edmond Scanlon, CEO of Kerry Group.
“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. 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,” adds Massimo Garavaglia, CEO of IRCA.
“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.”
The potential sale is subject to relevant regulatory approvals and routine closing adjustments.
Employee consultation and information processes have commenced in relevant jurisdictions.
Acquisition trail
This would represent IRCA’s third acquisition since Advent International acquired it in July 2022.
It follows the recent acquisitions of Anastasi Group, an Italian pistachio ingredients company, and Cesarin SpA, an artisanal fruit-based ingredients company.
The potential sale is expected to close in the first half of 2023 following the employee consultation, information processes and receipt of regulatory approvals.
Kerry says the proceeds are expected to be used for general corporate purposes and “the continued strategic development of the Taste & Nutrition business.”
Edited by Gaynor Selby
