BlackRock spends €120m on Kerry Group shares
Published 26/07/2015 | 02:30
The world's largest asset manager, BlackRock, has shelled out €120m to increased its stake in Kerry Group by over a third.
Documents filed with the Irish Stock Exchange reveal the transaction took place on Friday, July 17, when BlackRock bought almost 2m Kerry shares.
It now owns 4pc of the Tralee-headquartered food group, which posted a 2.5pc year-on-year growth in business volumes in the first quarter of 2015.
In April it reached a deal to buy signed an agreement to acquire US drinks firm Insight Beverages,
Investec Ireland's head of equity sales Ian Huggard said investors have been impressed by Kerry's research capabilities.
"They very successfully developed a research and development centre in the United States in a place called Beloit, Wisconsin," Huggard told the Sunday Independent.
"In Beloit they bring their customers in, and customers can within a week, go in with a food concept, develop it out, put it on to their platform. From concept through to actual production of food at the back, they can test food concepts. This kind of stuff used to take weeks. They've got so many people working in Beloit that can do food tasting and that kind of stuff so you get feedback . . . it's really quite fantastic.
"And they're repeating that with an even better centre in Naas, which is actually operational now. They're going to bring investors to that when it's opened later on this year, and people are looking at that research capability that they've got and they think that it'll put them in a better place competitively, because they can take the customers in now in Europe and do the same thing that they're doing in Europe."
Huggard said the company's business has moved away from consumer foods like Denny and Charleville cheese into food ingredients, dealing with companies like Unilever, which owns the Hellmann's, Flora and Knorr brands.
"What a lot of the Unilevers are doing is they're reformulating their offerings to customers who are looking to stay on top of food trends like health and nutrition trends, taking sugar and salt out food. But to do that, you have to reformulate the ingredients to make sure it tastes, looks and feels the same.
"So that's what Kerry does - it's well placed within consumer foods for those secular trends. That's now new, that's kind of its position. It's spent the last number of years probably getting a little more focused in that area and less focused on the consumer foods that people in Ireland would have known growing up.
"When we think of Kerry, we kind of think of all the stuff in our refrigerator that Kerry manufactures. That's less and less a part of the overall mix of the business."
Sunday Indo Business