Kerry Group to acquire two US businesses for €325m
Group has said it will finance both acquisitions from existing lines of credit
In accounts filed last month, Kerry Group said business volumes rose by 3.5 per cent in the first nine months of the year.
Dairy giant Kerry Group is to acquire two US businesses for about €325 million, the company said on Friday.
The foods group said in a note to Euronext Dublin, the new trading name for the Irish stock exchange, that it had reached an agreement to acquire Ariake USA, the North American business of Ariake Japan, subject to regulatory approval and customary closing conditions.
Furthermore, agreement has been reached to acquire Southeastern Mills’ North American coatings and seasonings business (SEM), subject to customary closing conditions.
“These acquisitions further enhance the group’s foundational technology portfolio, as well as strengthening its food-service positioning in line with strategic growth priorities,” said Kerry Group.
The total consideration for the acquisitions is expected to be about €325 million.
The acquisitions have annualised pro-forma third-party revenues of approximately €125 million. The group will finance both acquisitions from existing lines of credit.
Ariake USA produces natural clean label savoury taste products derived from poultry, pork and vegetables at its facility in Harrisonburg, Virginia.
“Ariake USA’s highly specialised extraction technologies and development capabilities produce a suite of tailored solutions across a number of end use markets,” said Kerry Group.
“This acquisition further enhances Kerry’s extensive authentic taste and clean label portfolio, whilst also complementing the group’s from-food-for-food heritage.”
SEM manufactures coatings and seasonings at its manufacturing base in Rome, Georgia. “This acquisition complements Kerry’s authentic taste portfolio and further develops the Group’s industry leading offering into the meat end use market,” Kerry Group noted.
In company accounts filed last month, Kerry Group said business volumes rose by 3.5 per cent in the first nine months of the year, as it reaffirmed its full-year earnings per share growth of 7 to 10 per cent.
In the nine months to September 30th, business volumes at Kerry Group, which produces brands including Dairygold, Low Low, Denny and Galtee, rose by 3.5 per cent, with a 4.1 per cent jump in taste and nutrition, and a 1.2 per cent increase in the group’s consumer foods division. Revenues rose by 2.2 per cent.
Pricing fell by 0.2 per cent, reflecting lower raw material prices on average across the period, but Kerry said the group trading margin was maintained.