Kerry Group has announced that it has reached an agreement to acquire food preservation company Niacet for €853 million ($ 1.015 billion).
Kerry announced this morning (Monday, June 21) that it had agreed to acquire Hare Topco (trading as Niacet Corp.) from an affiliate of funds advised by SK Capital Partners, LP (‘SK Capital’) and other shareholders on a cash-free, debt-free basis, subject to customary closing adjustments.
Niacet is a business involved in technologies for preservation. It has positions in bakery and pharma, and cost-effective, low-sodium preservation systems for meat and plant-based foods across both conventional and clean label solutions.
Niacet is differentiated by its proprietary drying and granulation process technologies in its key market categories of bakery, meat and pharma. The business has customers in over 75 countries and key manufacturing sites in the city of Niagara Falls in the US state of New York and the town of Tiel in the Netherlands.
The company is expected to have, by year end 2021, pro forma annualised revenue of around $220 million (€185 million) and earnings before interest, taxes, depreciation, and amortization (EBITDA) of around $66 million (€56 million), representing an EBITDA margin of some 30%.
Niacet will be integrated into Kerry’s global food protection and preservation platform.
Kerry Group CEO Edmond Scanlon said this morning: “The acquisition of Niacet’s complementary product portfolio enhances our leadership position in the fast-growing food protection and preservation market and significantly advances our sustainable nutrition ambition.
“Niacet is a business with market leading positions; differentiated technologies; and a strong and highly experienced management team.”
Kelly Brannen, CEO and significant minority owner of Niacet, said: “This transaction affirms the reputation we have developed as a trusted industry leader with a long-dated track record of making the highest quality products in the market.”
Among the strategic rationale for the acquisition, Kerry noted that this included a growing demand for plant-based foods requiring new food safety and shelf-life solutions.
The acquisition is expected to close by the end of the third quarter of 2021 subject to customary closing conditions and regulatory approvals. The transaction will be funded via a combination of existing liquidity and a dedicated bridge facility.
The bridge facility will be repaid out of proceeds from the sale of Kerry’s consumer foods’ meats and meals business for approximately €819 million, per the announcement last Thursday, which is expected to be complete in the fourth quarter of 2021.