Total Produce buys healthfoods distributor

Fyffes spin-off Total Produce has bought Wholefoods Wholesale, an Irish healthfoods distributor, for an estimated €5 million.

In a statement to the stock exchange yesterday, Total Produce said it had acquired a 92 per cent stake in the company, which had turnover of €18 million last year. The company declined to divulge the price paid, but trade sources said it was about €5 million.

Wholefoods Wholesale is the leading distributor of healthfood products, including vitamin and mineral supplements, to independent healthfood stores in Ireland. The acquisition marks a move into a new area for Total Produce, which since its spin-off from Fyffes has focused on growing, sourcing, importing, packaging, distributing and marketing fresh produce to the wholesale and retail trade. This is its first foray into the dry-food market.

In the statement, Total Produce said it welcomed the opportunity to become involved in a sector that has grown strongly in recent years.

Analysts were in agreement, describing it as a niche, but high-growth, category. "The healthfoods sector is a popular target for food companies, given its higher growth profile, and there will be some synergy overlaps with Total Produce in terms of logistics into mainstream shops and multiples," Liam Igoe, a food analyst at Goodbody, said.

Although small, the acquisition is in line with Total Produce's plan to grow its revenue. In March, it revealed plans to double sales to €4 billion over the next five years after announcing an 11 per cent increase in sales to €1.861 billion in 2006.

At the time of the results, chairman Carl McCann said acquisitions would be a key driver of the group's performance.