Kerry Group, a diary giant announced on Friday about its plan to acquire two businesses for roughly €325 million. In a note, the foods group said that it is going to take over Ariake USA, the North American business of Ariake Japan. The discussions are going on around regulatory approval and customary closing conditions.
The Irish consumer foods company will also acquire Southeastern Mills’ North American coatings and seasonings business (SEM), following the customary closing conditions. The group’s spokesperson said that such acquisitions are helpful in improving the foundational technology portfolio of the group and will also strengthen its foodservice positioning matching the strategic growth priorities. As a whole, the acquisition are expected to cost €325 million to the group.
The purchases have annualized pro-forma third-party revenues of nearly €125 million. Kerry will rely on the existing lines of credit to finance the two acquisitions. Kerry Group is a producer of brands like Galtee, Dairygold, Low Low, and Denny.
Ariake USA produces clean and natural savory taste products using raw materials derived from poultry, pork and vegetables at its Harrisonburg, Virginia facility.
The acquirer mentioned that Ariake USA has highly specialized extraction technologies and boasts superb development capabilities to develop a group of customized solutions for numerous end use markets. As per the diary giant the acquisition will also add to Kerry’s widespread authentic taste and clean label portfolio.
The food group spokespersons added that SEM manufactures seasonings and coatings at its manufacturing base in Rome, Georgia. They noted that the acquisition will further enhance the Group’s industry leading offering into the meat end use market.
The food group added that its business volumes climbed by 3.5 per cent in the first nine months of 2018, reaffirming its full-year earnings per share growth of 7% to 10%. During the nine months till September 30th, the group’s business volumes rose by 3.5%, with a 4.1% growth in nutrition and taste, and a 1.2% profit in the consumer foods division of the group. It recorded a rise of 2.2% in its revenues.
Pricing decline by 0.2% during the period, indicating the lower raw material prices on average, but the group said that its trading margin was maintained. On Friday morning, the shares in Kerry Group were up 0.2% at EUR89.50.