Kerry forks out $735m for three US food and beverage businesses
Published 16/10/2015 | 02:30
Kerry Group has spent $735m (€646m) on three US acquisitions, with chief executive Stan McCarthy saying the businesses provided the company with "tremendous growth opportunities".
The group, which is Ireland's third-biggest listed company, is buying Wisconsin-based Red Arrow Products; Massachusetts-based Island Oasis; and Biothera's Wellmune.
Kerry said that last year the three businesses had combined turnover of $301m (€264m) and generated earnings before interest, tax, depreciation and amortisation (EBITDA) of $59m (€52m).
Last year, Kerry generated revenues of €5.75bn and a trading profit of €636.4m. That revenue figure was down slightly on 2013, while the trading profit was slightly higher.
Red Arrow Products is a supplier of natural smoke and savoury grill flavours.
Its clients are involved in the meat, culinary and food industry markets around the world.
Apart from two manufacturing facilities in Wisconsin, it has application and development centres in Germany and Sweden.
The company was founded in 1959 and was sold in 1988 to executives including its chief executive, Dale Hanke.
It exports to over 100 countries and was the only American-owned smoke flavour manufacturer. Last year, it embarked on a project to build a new multi-million dollar headquarters that was also to house laboratories.
Island Oasis sells cocktail mixes and coffee blends and beverage equipment to the restaurant, leisure and hospitality sectors in the United States. It has manufacturing sites in Ohio and New York. It was founded in 1984 by chief executive Mike Herbert. In 2011, it raised $5m from investors.
It is thought that New York private equity firm TSG backed the fundraising. TSG also backed Island Oasis' first private equity investment in 2009, when the drinks firm raised $10m.
Biothera's Wellmune business produces a food, beverage and supplement ingredient that has been clinically proven to strengthen the immune system. Wellmune can be found in products ranging from chocolate to drinking straws. The product is derived from baker's yeast.
Biothera has two distinct units: its pharmaceutical business that is developing a cancer treatment; and its health division that makes Wellmune.
Mr McCarthy said the three acquisitions bring a number of innovative platforms to Kerry.
"The businesses being acquired present tremendous growth opportunities throughout Kerry's global developed and developing markets," he said.
Shares in Kerry, which has a market capitalisation of €12bn, rose 1.2pc yesterday.
The company has operations all over the world. In the first six months of this year, its revenue topped €3bn, having risen 4.7pc. Its trading profit was 9pc higher at €300m.
The company forecast an 8.1pc increase in full-year adjusted earnings per share.
This month, Kerry opened a global technology and innovation centre in Co Kildare. It has invested about €100m in the project.
The centre will serve the company's EMEA customers and employs about 800 people. Another 100 staff are expected to be employed there by the end of next year.