By Lawrence White and Padraic Halpin
DUBLIN – Irish ingredients giant Kerry said on Monday it will buy preservatives maker Niacet Corp for 853 million euros ($1.01 billion), investing the proceeds of the sale of its consumer foods operations in its core business.
Kerry last week said it would sell its British and Irish Consumer Foods’ Meats and Meals business, whose brands include Richmond, Denny and Galtee, to U.S. poultry producer Pilgrim’s Pride Corp for 819 million euros.
Niacet creates preservation technologies for use in bakery, meat and pharmaceuticals, and low-sodium preservatives for meat and plant-based food.
The deal comes at a time of growing demand for longer-lasting food as consumers become more aware of the environmental impact of waste, while producers are seeking new ways to manage the safety and shelf life of plant-based meat alternatives, Kerry said.
Kerry, which says food and drinks containing its ingredients reach over one billion people around the world, reported in April that its biggest influx of new customers was in the fast growing sector for meat substitutes based on plants.
The acquisition “enhances our leadership position in the fast-growing food protection and preservation market,” Kerry Group Chief Executive Edmond Scanlon said on Monday.
Kerry will buy Niacet, formally known as Hare Topco Inc, from an affiliate of funds advised by SK Capital Partners, with the deal expected to close in the third quarter of this year.
Niacet is expected to have pro forma annualised revenue of around 185 million euros and earnings before interest, taxes, depreciation, and amortization (EBITDA) of 56 million euros, representing an EBITDA margin of 30%.
The consumer foods business Kerry sold last week reported 828 million euros in revenue last year, with far lower relative core earnings of 86 million euros.
($1 = 0.8427 euros)