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Glanbia bulks up to do the splits

GLANBIA timed the acquisition of US sports nutrition company BSN to coincide with the release of its full-year trading statement. The Kilkenny-based company is paying €108m for BSN, the equivalent of just over eight times underlying operating (pre-interest) profits.

The trading statement revealed that Glanbia delivered a near-20 per cent increase in earnings (post-tax) per share for 2010 and expects a further 11-13 per cent rise in EPS for 2011.

Glanbia has been one of the major beneficiaries of the increase in international dairy commodity prices in 2010, with its share price having risen by 50 per cent to €4 over the past year.

But the acquisition of BSN, which will increase annual sales of Glanbia's sports nutrition business to almost €500m, indicates the group does not see its long-term future in commodity dairy processing.

This makes it virtually inevitable it will once more try to spin off its Irish dairy processing operations to the controlling co-op.

Sunday Indo Business