Monday 20 November 2017

Massive deal likely to make a small fortune for chairman and shareholders


Peter Flanagan

Peter Flanagan

IF Valeo Foods' plan to take over Jacobs Fruitfield in a deal worth close to €80m is ultimately successful, it will create a new heavyweight in the Irish food industry and will likely make a small fortune for the Jacob Fruitfield shareholders.

Chief among them is company chairman Michael Carey, whose 54pc shareholding would be worth more than €40m to him personally.

Michael Tunney and David Andrews also stand to benefit substantially through their private equity firm Lioncourt Capital, which has a 31pc share in Jacobs.

Former management own 10pc of the firm with the remaining 5pc controlled by current management, including chief executive Seamus Kearney.

Mr Carey is a well-known figure in the food business here, and used his pay-off from Kelloggs to buy out Fruitfield Foods from Nestle in 2002 and Jacobs Biscuits from Danone two years later.

The company laid off more than 200 workers in 2009 when it closed a Jacobs site in Tallaght. It employs 100 people today compared to 430 seven years ago. The Belgard Road factory had been used by Jacobs for more than 30 years until it was closed and production shifted to eastern Europe.

When the closure was announced in 2008, local councillors said they had supported rezoning of other Jacobs sites on the understanding the company would keep investing in the Belgard Road site.

Mr Carey, however, said the factory was "extremely uncompetitive with outdated manufacturing equipment".

An immediate windfall may be limited in size, however, as it is expected a "substantial proportion" of the sale's proceeds will be reinvested in the business.

In 2009, the company made a profit of €11.1m on turnover of €81.6m.

Irish Independent

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