Business

Friday 30 September 2016

Aryzta completes acquisition of 49pc stake in France's Picard

Paul O'Donoghue

Published 20/08/2015 | 07:55

Aryzta boss Owen Killian
Aryzta boss Owen Killian

Swiss-Irish bakery group Aryzta has completed its acquisition of 49pc stake in French retailer Picard.

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The deal, when it was first announced earlier this year, said that Aryzta would pay €446.6m for the investment.

It also followed shortly after the announcement that after Aryzta raised over €400m after it sold off a large stake in Irish agricultural services business Origin Enterprises, a large part of which has gone towards funding the Picard investment.

Picard specializes in breads, pies, and desserts. It had a turnover of €1.37bn last year and is now valued at €2.25bn. Picard has a strong retail presence in France and commentators said that Aryzta now want to internationalise the brand.

When the deal was first revealed it was announced that Aryzta will have the right to exercise a call option in three to five years to acquire 100pc of Picard.

Picard will be treated by Aryzta as an associate and will be expected to make a net contribution of 3pc to underlying EPS on an annualised basis, offsetting half of the negative 6pc impact of the Origin placement.

Picard will be separately managed and separately funded with debt non recourse to Aryzta. Aryzta will have two seats on the Picard board.

The move has been the subject of criticism from some analysts, who have questioned the rationality on acquiring a minority stake in the business and have also raised flags about an apparent limited scope of possible long-term synergy prospects.

Speaking at the time of the initial announcement of the deal Aryzta CEO Owen Killian said that the investment in Picard is "consistent with Aryzta's strategy of consumer relevancy through diversifying markets and channel positioning."

He added: "Picard has delivered consistent revenue, EBITDA and market share growth over the past forty years."

Aryzta, which was formed from a merger of Irish company IAWS and Swiss firm Hiestand, is best known in Ireland for its Cuisine de France range.

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