Valeo Foods has reached agreement to acquire rival Irish foods business Jacob Fruitfield Food Group for an undisclosed consideration. The deal is subject to regulatory approval.
Valeo was formed in 2010 and comprises a growing portfolio of leading Irish consumer brands which it supplies to Irish and international retail customers. The Valeo portfolio currently includes the Batchelors, Odlums, Shamrock, Sqeez, Roma,Erin, Amigo, Lustre and Picnic brands.
Jacob Fruitfield brings together Fruitfield Foods, which was acquired from Nestle in 2002, and Irish Biscuits, which was purchased from Groupe Danone in 2004. The company’s brands comprise a number ofIreland’s best known consumer food products including Jacob’s biscuits (Fig Rolls,Kimberley, Mikado and Coconut Creams), Chef sauces, Fruitfield jams and marmalades and Silvermints and Scots Clan sweets and confectionery.
The combined business of Valeo and Jacob Fruitfield will have an annual turnover of approximately Eur300 million and a combined workforce of nearly 500. Jacob Fruitfield generated an operating profit of Eur9.8 million in its most recent financial year to 31st December 2010.
The deal is consistent with Valeo’s strategy to grow its business in the Irish food sector where international competition, domestic manufacturing costs and pressure to meet retailers’ and consumers’ requirements in terms of price and value is an ongoing and significant challenge.
Valeo is controlled by CapVest, theLondonbased European mid-market private equity firm. The acquisition of Jacob Fruitfield will be financed by a combination of cash, vendor loan note and new equity. Apart from CapVest, significant shareholders in the enlarged Valeo include Origin Enterprises, the leading Irish based agri-services group and one of the original investors in Valeo, and Jacob Fruitfield selling shareholders who are reinvesting in the enlarged business. Origin Enterprises will subscribe Eur7.9 million for additional equity in Valeo and will have a 32% shareholding in the enlarged entity.