Cuisine de France owner in €730m deal for US bakeries
Published 11/03/2014 | 02:30
SWISS-Irish food company Aryzta has bought two American companies to expand in the US and Canada.
The owner of the Cuisine de France brand will pay €730m for Pinebridge Bakery in Canada and Cloverhill Bakery in the US, which had combined sales last year of €400m and profits of about €50m.
Analysts said the acquisitions should help Aryzta, which was formed through the merger of Ireland's IAWS and Switzerland's Hiestand Holdings in 2008, to reduce its reliance on its traditional earners like frozen par-baked bread.
Sixty-year-old Pineridge's products include thaw-and-sell and ready-to-serve goods; while Cloverhill offers individually wrapped pastries.
"These look to be designed to diversify baking operations from near total dependence on frozen par-baking and from in-store preparation. In addition, new channels, vending and the convenience store sectors are being engaged in North America" said Davy Stockbrokers' John O'Reilly.
News of the acquisitions came as Aryzta released its latest half-year results, which showed a marginal rise in revenues in the six months to the end of January.
Group revenue rose 1.7pc to €2.1bn during the period with food sales up 6pc to €1.59bn.
The company's European division did well – up 19pc as the acquisition of German baker Klemme started to pay off.
Aryzta bought Klemme for €280m last year, its biggest purchase since 2010, which gave it access to more than 2,500 bakery products and a big presence in German retailers Aldi and Lidl.
Food sales elsewhere, however, did not enjoy similar success. Sales in North America and the rest of the world fell.
Results were also dragged down by the impact of a stronger euro during the period, – especially against the Canadian dollar and emerging markets.
Meanwhile, revenues at Irish subsidiary Origin – in which Aryzta is a majority shareholder – fell 9pc to €518m.
The company reiterated its forecast of double-digit earnings growth for 2014.