US associate helps Danone take a 37% stake in Glenisk yogurt firm

French food group Danone and a US associate called Stonyfield Farm have taken a 37 per cent stake in Glenisk, the Tullamore-based organic yogurt company.

Some sources said the equity investment in Glenisk values the family-owned group at up to €20 million, but Glenisk marketing director Vincent Cleary said the valuation was "probably significantly less than that".

The vehicle behind the investment is Stonyfield Europe, which is 80 per cent-owned by Danone. The remainder is held by Stonyfield Farm, which claims to be the world's biggest manufacturer of organic fresh dairy products.

In business since 1987, Glenisk was established by the late Jack Cleary on the farm beside his family's creamery, Tullamore Dairies. It is still managed by members of his immediate family, who plan to stay on after the Stonyfield Europe investment.

"The money will be invested straight into the business," said Vincent Cleary. He said Glenisk planned to increase capacity by 10 in the next three years while bringing production in line with EU and global standards.

Mr Cleary said Glenisk's turnover was in the region of €7.5 million in the year to March, with pretax profits "down a bit but not significantly" from €516,177 in the year to March 2005. The annual pretax profits were up from €103,305 in the previous year and retained profits stood at €790,000 in March 2005.

Though best known for its organic yogurt, Glenisk also produces organic and fresh goats' milk, organic cows' milk, organic drinks and organic cheese. The "organic" label is used on the agricultural products that use no pesticides or synthetic fertilisers.

Stonyfield Europe chairman and chief executive Gary Hirschberg said his family, which set up up the Stonyfield Farm business with seven cows 23 years ago, had known the Clearys for 10 years. "This is in fact a marriage of kindred spirits," he said.

The Glenisk investment is the first investment for the joint venture.

Danone acquired 40 per cent of Stonyfield Farm in 2001 and increased its stake to 80 per cent in 2004. The group's annual sales are in the region of €200 million.

As part of the transaction, which was signed off yesterday, Enterprise Ireland and a Bank of Ireland-backed business expansion scheme (BES) are exiting the company. There was no comment yesterday from either Enterprise Ireland or Bank of Ireland.