Kerry plans €500 million sale of its sweet ingredients business
The Kerry Group was among key exhibitors at the recent Gulfood Manufacturing event. Pic: Neill Barston
The Kerry Group has unveiled plans for a €500 million sale of its sweet ingredients business, which includes major applications for confectionery, snacks and bakery markets to US-based chocolate, creams and semi-finished food specialist IRCA, reports Neill Barston.
According to the Irish-headquartered taste and nutrition group, the move represented an evolution of its strategy reported in 2021 as it has continued to refine its overall company portfolio aligned to sustainably-focused product ranges within the wider food market.
As the business noted, its sweet ingredients assets have placed it as a key manufacturer of sweet and cereal products with a broad range of technological capabilities, primarily serving the end markets of bakery, cereal, confectionery, dairy and ice cream in Europe and the US.
Notably, the combination of IRCA and Kerry’s Sweet Ingredients Portfolio is expected to create a global leader in semi-finished food ingredients with around €1 billion in revenues, delivering an broad international business, including substantial US presence.
Kerry’s present operational footprint covers four manufacturing facilities in the US (in Illinois, Kansas, Missouri, and California), and six facilities across the UK, the Netherlands, Germany and France. The portfolio incorporates a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées. The expected attributable financial results for the year ended 31 December 2022 include revenues of €405m and EBITDA of €41m.
Edmond Scanlon, CEO of Kerry Group, commented: “We are pleased to have entered exclusive negotiations with IRCA, who have a strong track record of developing their business within the category. This transaction would represent another strategic development in Kerry’s evolution, as we continue to look to enhance and refine our Taste & Nutrition portfolio, aligned to the areas where we can create the most value.”
Massimo Garavaglia, CEO of IRCA, believed that acquiring Kerry’s business interests in the sweet ingredient market would offer a strong step forward for its own activities.
He said: “We are delighted to partner with Kerry on this transaction and look forward to its successful conclusion. The Sweet Ingredients Portfolio is a high-quality business with a differentiated set of technologies, and we are excited to welcome their talented team who, we believe, share our passion and drive to deliver the best for their customers and consumers. This acquisition would represent a strong fit with our portfolio, with its highly complementary product and technological capabilities, and help us to become a truly global player. We look forward to helping the Sweet Ingredients Portfolio realise its full potential as part of the IRCA family.”
Francesco Casiraghi, Managing Director at Advent International, commented: “We are delighted to welcome this best-in-class sweet ingredients business to the IRCA family, which would represent a major step in our goal of creating a genuine global leader in semi-finished food ingredients. There are so many exciting long-term opportunities for this combination, and we look forward to supporting the management team in this next phase of growth for the business.”
This would represent IRCA’s third acquisition since it was acquired by Advent International (“Advent”), one of the largest and most experienced global private equity investors, in July 2022. This follows the recent acquisitions of Anastasi Group, a leading Italian pistachio ingredients company, and of Cesarin SpA, a leading artisanal fruit-based ingredients company.
The Potential Sale is expected to close in the first half of 2023 following the employee consultation and information processes and receipt of regulatory approvals. On receipt, the proceeds from the Potential Sale are expected to be used by Kerry for general corporate purposes and the continued strategic development of the Taste & Nutrition business.