Posted on 13 September 2010.
Origin Enterprises, the Irish agri-nutrition and food business, and private equity firm CapVest have joined forces to create Valeo Foods Group, a new Eur200m turnover Irish consumer foods company. Valeo Foods, in which Origin Enterprises is taking a 45% stake, is acquiring Origin Foods, Origin Enterprises’ Irish branded food business, for an enterprise value of Eur78m. Valeo is also purchasing Irish food company Batchelors for an undisclosed price.
Origin Foods comprises three of Ireland’s top food brands – Odlums, Shamrock and Roma which enjoy market leading positions in the ambient home-baking and Italian food ingredients categories. Origin Foods has an extensive manufacturing and route-to-market capability servicing the major retail, bakery and food service channels. The business being acquired by Valeo excludes the Mars Ireland distribution activities, the contract for which is scheduled to cease.
Founded in 1935, Batchelors is a leading manufacturer and retail category partner for some of Ireland’s most iconic food and drinks brands, including Batchelors, Erin, Sqeez, Amigo and Lustre servicing the canned vegetables, dry sauces and mixes, ambient juices and canned fruit categories. Batchelors also represents a number of significant international food and beverage companies in the Irish market.
Batchelors was part of British convenience food group Northern Foods for 18 years until it was sold to Maiden Acquisition Company, a joint venture formed by Cork-based Barry’s Tea and Bank of Scotland Ireland, in early 2004 for Eur62 million with a further Eur33 million in respect of accumulated cash balances. When bought by Maiden Acquisition Company, Batchelors had achieved profits before tax of Eur7.9 million on turnover of Eur76 million for the year to March 2003.
Peadar Kearney, head of Origin Foods, will be chief executive of Valeo and Aidan O’Byrne, finance director of Batchelors, will become chief financial officer of Valeo. Valeo will be well positioned to participate in further brand consolidation in the Irish consumer food market.
The sale of its consumer food business will allow Origin Enterprises to focus on the development of its agri-services platform. The creation of Valeo is in line with CapVest’s strategy of investing in market leading businesses with strong management and in categories with further consolidation opportunities.
CapVest has a long history of successful investment in the food sector and the companies it has partnered with have included Food Vest (now known as the Findus Group), Europe’s largest frozen food manufacturer, and Vaasan & Vaasan, the largest bakery company in Finland and the Baltic region. CapVest’s current portfolio includes Findus Group, United Coffee, one of Europe’s largest coffee companies, and The Mater Private, Ireland’s leading private healthcare facility.