Total Produce to pay €15m for half share in Dutch distributor

FRUIT DISTRIBUTOR Total Produce will pay up to €15 million for a half share in Dutch fruit distributor Frankort Koning Beheer Venlo and its subsidiaries.

The Irish company has agreed to pay an initial sum of €6 million for the stake, with additional sums of up to €9 million dependent on the company’s performance over the coming years.

Frankort Koning Beheer Venlo, which operates primarily in the Netherlands, Germany and Poland, recorded turnover of €296 million last year and has booked an average profit after tax of €2.7 million over the last three years.

The deal is subject to regulatory clearance.

In a statement to the Irish Stock Exchange, Total Produce said the current Frankort Koning management team had agreed to remain in place.

The company said it expected the deal to be “earnings enhancing from the date of completion”.

Total Produce chief executive Carl McCann said the acquisition would help to increase his company’s presence in key European markets.

The deal comes less than a month after the company upped its investment in South African fruit exporter Capespan.

Total Produce indicated in September it was pursuing investment opportunities in both new and emerging markets.

NCB analyst Darren Greenfield said there was scope for synergies from the acquisition “given the geographical overlap between Total Produce and Frankort in the Netherlands and Germany”.

He noted Poland appeared to be a new market for Total Produce.

“The deal continues Total Produce’s strategy of bolt-on acquisitions and appears to make sense strategically and financially,” the NCB analyst said in a note to clients.