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Value of Irish food M&As up 32pc to €726m in 2012 – Grant Thornton report

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Value of Irish food M&As up 32pc to €726m in 2012 – Grant Thornton report

February 06
14:28 2013

Ciara Jackson

The value of mergers and acquisitions in the Irish food and beverage (F&B) sector increased by 32pc to €726m in 2012, a growth largely driven by Ireland’s reputation for quality in this area, according a new Grant Thornton report.

Released today, Smart Money in Food & Beverage: Tracking growth in turbulent times contends that Irish food companies must continue to invest in ensuring a robust and safe supply chain to protect the reputation of an industry that contributed €9bn in exports last year. This equates to over €2,000 for every person in the country, compared to €400 per person in the UK.

“The level of deal activity shows the food sector had a very strong year, but the recent ‘horsegate’ controversy is a cause for concern,” said Ciara Jackson, head of food at Grant Thornton Ireland. “The reputation of Irish produce has its foundation in high standards of regulation and food safety, and our natural green environment. It is vital that the industry collaborates to create a resilient supply chain that can minimise costs whilst ensuring Irish produce maintains its international standing.”

The report highlights increasing interest from US companies in investing in high quality Irish food and drink companies with authentic products and strong brands. US acquisitions of Irish businesses last year included Hain Celestial’s €10m purchase of Cully & Sully, the Cork-based producer of high-end ready meals. Whiskey giant Beam Inc also completed its purchase of Cooley Distillery in January 2012, and followed up in December with the acquisition of Louth-based 2 Gingers Whiskey.

Equally, Irish firms were major investors in the US in 2012, with Kerry Group, Glanbia, Greencore and C&C all making major purchases.  C&C’s €235m acquisition of the Vermont Hard Cider company was the biggest outbound US transaction last year, with Glanbia’s €49m purchase of nutrition drink group Aseptic solutions the second largest.

“In this report, we’ve noticed a big increase in activity between the US and Ireland, with 10 deals in 2012 compared to just two in 2011,” said Jackson. “Companies such as Glanbia and Kerry Group have had tremendous success due to strong business and cultural synergies and both managements understanding of the opportunities and the scale that the American sports nutrition and food ingredients market has to offer.

“In the future we also see Asia as a growing market for Irish food exports, with F&B exports up 25pc last year and the region targeted for further expansion in 2013 according to Bord Bia’s recent review of F&B export prospects. Cash-rich Asian companies are potential investors in Irish food businesses whose operations may be thriving, but where balance sheets are stretched by ill-judged property investments made in the boom.”

Only publicly disclosed deal values are captured in the analysis of total M&A value.

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