Niacet, which operates in the bakery, meat and plant-based sectors, is active in 75 countries and has manufacturing sites in the US and Netherlands. The company, projected to generate revenues of £158.6m and EBITDA of £47.6m for 2021, will be integrated into Kerry’s global food protection and preservation platform.
The acquisition is expected to be completed by the end of the third quarter of 2021, subject to customary closing conditions and regulatory approval.
Edmond Scanlon, CEO of Kerry, said Niacet’s product portfolio would enhance the group’s position in the food protection and preservation market and ‘significantly advance’ its ‘sustainable nutrition ambition’.
“Niacet is a business with market leading positions, differentiated technologies and a strong and highly experienced management team. We are pleased to welcome the Niacet team to Kerry and we are excited at the potential the combination of our two businesses offers to outperform in this important and attractive market,” Scanlon added.
Kerry’s deal to buy Niacet was reached with an affiliate of funds advised by SK Capital and other shareholders on a cash-free, debt-free basis.
Kelly Brannen, CEO and significant minority owner of Niacet, said: “I’d like to thank our employees for their dedication and commitment and SK Capital for its support throughout its ownership period. In partnership, we have strengthened and grown the company substantially, while establishing the next phase of Niacet’s growth.
“We view the sale to Kerry as a perfect fit. It will allow Niacet to grow at a much faster rate and sell in new markets around the world. We are very pleased to become part of the Kerry family,” Brannen added.
News of the Niacet acquisition follows Kerry’s announcement last week that it had agreed to sell its meats and meals business in the UK and Ireland to Pilgrim’s Pride for £704m.
The group said the proceeds from the meats and meals sale would be used for ‘general corporate purposes’ and the continued strategic development of its taste and nutrition business. In addition, Kerry announced plans to separate and realign its remaining dairy-related activities within the group’s consumer foods business.
In April, Kerry Group suspended talks over the sale of some of its dairy assets to Kerry Co-operative Creameries. Having completed a strategic review, the group has confirmed there will be no disposal of the dairy business for the time being.
The recent activity is part of a ‘general consolidation’ of more mature categories in the food sector, according to Julian Wild, corporate finance director for legal firm Rollits.
“Pilgrim’s Pride is already a major international player in these meat categories and will have been interested in further acquisitions to strengthen that position, while the Kerry businesses are long-established and bring some well-known brands in the Irish and UK markets,” he said.
“Kerry is fully focused on ingredients globally and has been looking to exit consumer foods for some time. They look to have achieved a very full price, so will be pleased with that result.
“M&A in the food sector is nowadays either about bigger players looking to consolidate, build market share and maximise synergies, or financial buyers seeking a home for their cash with the prospect of an early exit and attractive return,” Wild added.
“Long-term, innovative, committed UK food investors, generating real and sustainable growth to benefit all stakeholders, are few and far between.”