Poppets owner to sell off confectionery business

By James Ridler contact

- Last updated on GMT

Raisio has sold its confectionery business to Valeo Foods
Raisio has sold its confectionery business to Valeo Foods

Related tags: Mergers and acquisitions, Corporate finance, Brand

Finnish food group Raisio, owner of the Poppets and Fox’s Glacier Mints brands, has sold its confectionery business to Ireland-based Valeo Foods in a deal worth €100M (£88.6M).

Raisio’s confectionery operations in the UK and the Czech Republic, including six factories, were transferred to Valeo and became part of the business at the end of December last year.

Pekka Kuusniemi, Raisio ceo and president, said: “The divestment of the confectionery business is an important strategic step for Raisio towards a responsible forerunner focusing on healthy foods.

“Together with our already strong balance sheet, the proceeds from the deal enable extensive acquisitions that strategically fit our core business.”

‘Strategically fit our core business’

The divested confectionery operations included Raisio’s best-known brands, Poppets, Fox’s and XXX mints.

Valeo Foods’s ceo Seamus Kearney said: “We are very excited about the opportunities to expand and grow the acquired businesses through a combination of significant new capital and brand investment.”

Raisio also announced last month (December 22) it was to write-down €9.4M (£8.3M) in its 2017 financial statements, after updating calculation of goodwill and brand values, as well as the fair values of its balance sheet items.

It expected to take a €49M (£43.5M) hit to its earnings before interest, tax, depreciation and amortisation. Raisio said the sale of its confectionery business would cost the company €38M (£33.6M).

€49M hit to its earnings

In 2016, net sales for Raisio’s confectionery business totalled €100M (£88.6M). Raisio’s confectionery operation has about 1,000 employees who will be transferred to Valeo Foods under the terms of the agreement.

Valeo has operations in Ireland, the UK and Europe. It manufacturers a range of snacking and sweet treats, health and wellness products, baking and meal ingredients and beverages. The company has annual sales of about €700M (£620M).

Meanwhile, market analyst Catalyst Corporate Finance’s top five food and drink industry mergers and acquisitions of 2017 feature in this photogallery.

Related topics: Business News, Confectionery

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