Kerry Group plc announced Wednesday that it has entered into exclusive negotiations to sell the trade and assets of its Sweet Ingredients Portfolio to IRCA, an international leader in chocolate, creams and other high-quality semi-finished food ingredients, for a consideration of €500m.
The potential sale is subject to relevant regulatory approvals and routine closing adjustments. Employee consultation and information processes have commenced in relevant jurisdictions.
The Sweet Ingredients Portfolio is a leading manufacturer of sweet and cereal products with a broad range of technological capabilities, primarily serving the end markets of bakery, cereal, confectionery, dairy and ice cream in Europe and the U.S. Its operational footprint covers four manufacturing facilities in the U.S. (in Illinois, Kansas, Missouri and California), and six facilities across the U.K., the Netherlands, Germany and France. The portfolio incorporates a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées.
The expected attributable financial results for the year ended 31 December 2022 include revenues of €405m and EBITDA of €41m.
“We are pleased to have entered exclusive negotiations with IRCA, who have a strong track record of developing their business within the category," said Kerry Group CEO Edmond Scanlon. "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.”
“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, and 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," said IRCA CEO Massimo Garavaglia. "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. We look forward to helping the Sweet Ingredients Portfolio realise its full potential as part of the IRCA family.”
“We are delighted to welcome this best-in-class sweet ingredients business to the IRCA family, which would represent a major step in our goal of creating a genuine global leader in semi-finished food ingredients," said Advent International Managing Director Francesco Casiraghi. "There are so many exciting long-term opportunities for this combination, and we look forward to supporting the management team in this next phase of growth for the business.”
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 in revenues, a truly international footprint and a significant presence in the U.S. It would further strengthen IRCA’s leadership positioning and expand its broad assortment of high value-added ingredients.
This would represent IRCA’s third acquisition since it was acquired by Advent International, one of the largest and most experienced global private equity investors, in July 2022. It follows the recent acquisitions of Anastasi Group, a leading Italian pistachio ingredients company, and of Cesarin SpA, a leading artisanal fruit-based ingredients company.
The sale is expected to close in the first half of 2023 following the employee consultation and information processes and receipt of regulatory approvals. On receipt, the proceeds from the potential sale are expected to be used by Kerry for general corporate purposes and the continued strategic development of the Taste & Nutrition business.