Spain’s Ebro Foods divests organic food business to Sweden-based Midsona

24 Jul 2019 --- Spanish food processor Ebro Foods, through its fully-owned subsidiary Panzani, a French pasta brand, has received a binding offer from Sweden-based Midsona. This acquisition will include the entire share capital of organic food business Alimentation Santé and its subsidiaries Celnat, Vegetalia and Satoki. Panzani has decided to enter into exclusive negotiations with Midsona. The transaction is valued at €57.5 million enterprise value, on a debt/cash-free basis to be paid on closing.

The project will be presented to the relevant employee representative bodies for information and consultation, which is compulsory in France. The transaction is expected to be completed by October 1.

Midsona is listed on Nasdaq Stockholm, and names itself as a Nordic leader in organic foods, health foods and self-care. Midsona sales amounted to €271 million in 2018 and it employs 525 people. The company has expressed the ambition to broaden its reach in organic foods also in Southern Europe.

Alimentation Santé and its subsidiaries reached €35 million net sales in 2018. The company employs a multi-channel distribution strategy, with strong positions in both organic specialty stores and conventional retail. In 2018, the Company had net sales of €35 million and adjusted EBITDA of approximately €4.4 million.

Celnat is a specialist in organic cereal processing. Vegetalia and Satoki offer a broad range of organic vegetarian products and plant-based meat alternatives.

“The acquisition of Davert last year provided us with an important platform in the DACH region, which we recently complemented by the addition of Eisblümerl. Alimentation Santé is an important platform for further growth in France, Spain and other southern European markets,” says Peter Åsberg, CEO of Midsona.

In 2019, Midsona expects Alimentation Santé to achieve net sales of approximately €40 million and adjusted EBITDA of approximately €5 million. Not considering any transaction-related costs, the purchase price represents a current year enterprise (EV) multiple of approximately 11.5x EBITDA and a multiple of 8.2x EBITDA, including synergies. Synergies are anticipated to be realized in areas including operations, cross-selling and procurement. By 2021, these synergies are expected to have an annual impact on EBITDA of approximately €2 million.

Midsona will finance the transaction with a bridge loan and plans to complete a share rights issue worth up to €56.9 million later this year. The company states proceeds from the rights issue will enable the maintenance of financial ratios and pursuance of growth objectives. Midsona’s largest shareholder, Stena Adactum AB, has agreed to subscribe to its pro rata share of the rights issue.

In the framework of its strategic planning for 2019-2021, Ebro has analyzed the investment needed to reach a relevant position in the organic food business. “In this scenario, and considering the major interest shown by different world players, Ebro has decided to negotiate with Midsona AB the sale of Ebro’s Bio [organic] business,” the company states.

This disinvestment would allow Ebro to continue to concentrate its resources in promoting its premium, fresh and convenience business. Additionally, the company states the prominent position of Midsona in the organic industry will ensure optimal development and growth for Alimentation Santé.

By Benjamin Ferrer