Niacet deal to be funded using proceeds of meats and meals business sell-off
Source: Kerry Group

Kerry Group has agreed to acquire preservation foodtech company Niacet for $1.02bn, days after selling off its consumer foods’ meats and meals business.

Niacet develops technologies for preserving foods across several market segment categories including, bakery, meat and pharmaceuticals.

The business has customers in over 75 countries with manufacturing sites in the US and Netherlands.

Niacet is forecast to report pro-forma revenue of $220m and EBITDA of $66m in 2021, with an EBITDA margin of 30%, giving the transaction a value of 15.4x EBITDA.

The deal is set to close in Q3, and will be funded by a combination of existing liquidity and dedicated a bridge facility, which will be repaid using proceeds from the sale of Kerry’s meat and meals business.

Niacet’s offering is expected to enhance Kerry’s food protection and preservation platform, as well as grow revenue margins for the group via delivery of mid-to-high single digit volume growth.   

The acquisition is in line with Kerry’s protection and preservation strategy as Niacet’s leadership in conventional organic acids complements Kerry’s focus on clean label.

Kerry has also highlighted significant revenue synergies through combining products and process technologies.

Edmond Scanlon, CEO of Kerry Group, said: “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.

No more meats and meals

The dairy giant agreed to sell of its meats and meals business to Pilgrim’s Pride for €819m ($975.8m) last week.

The business arm’s portfolio of brands includes Richmond, Denny, Galtee, Fridge Raiders and Rollover and home delivery meals under the Oakhouse brand.

Kerry’s remaining dairy-related activities will not be sold, and instead realigned within the group’s consumer foods business, as the firm ends its strategic review of the department.

During the group’s 2020 earnings report in February, Scanlon said the company had €412m ($490.8m) in cash on its balance sheet with a net debt of €1.9bn ($2.3bn).

He said the company would continue to execute its bullish M&A strategy, with a focus on wellness, functional foods and proactive nutrition.

Date published: 21 June 2021

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