TIDMKYGA
RNS Number : 4669C
Kerry Group PLC
21 June 2021
Date: 21 June 2021
LEI: 635400TLVVBNXLFHWC59
This announcement contains inside information
KERRY GROUP
Kerry reaches agreement to acquire Niacet for EUR853m
Kerry Group plc ("Kerry"), the global taste & nutrition
company, today announces that it has reached agreement to acquire
Hare Topco, Inc. trading as Niacet Corp. ("Niacet") from an
affiliate of funds advised by SK Capital Partners, LP ("SK
Capital") and other shareholders for EUR853m ($1,015m(1)) on a
cash-free, debt-free basis, subject to customary closing
adjustments.
Niacet is a global market leader in technologies for
preservation. It has clear leadership positions in Bakery and
Pharma, and cost-effective low-sodium preservation systems for Meat
and plant based food across both conventional and clean label
solutions. Niacet is differentiated by its proprietary drying and
granulation process technologies in its key market categories of
Bakery, Meat and Pharma. The business has customers in over 75
countries and key manufacturing sites in Niagara Falls (USA) and
Tiel (The Netherlands).
Niacet has an attractive financial profile. For the year ended
31 December 2021 Niacet is expected to have pro forma annualised
revenue of c.$220m and EBITDA of c.$66m, representing an EBITDA
margin of c.30%. The transaction value of $1,015m represents an
implied EV/EBITDA multiple of 15.4x excluding synergies.
Following the acquisition, Niacet will be integrated into
Kerry's global food protection and preservation platform.
The addition of Niacet's complementary capabilities will enhance
Kerry's food protection and preservation strategy to offer new
products and technologies in a broader market. The resulting
revenue synergies are expected to enable the Niacet business to
significantly outperform the market and deliver at least
mid-to-high single digit volume growth. The transaction will be
growth and margin enhancing to Kerry and is expected to be
accretive to adjusted earnings per share in year one.
Edmond Scanlon , CEO of Kerry, commented "The acquisition of
Niacet's complementary product portfolio enhances our leadership
position in the fast growing food protection and preservation
market and significantly advances our sustainable nutrition
ambition. Niacet is a business with market leading positions,
differentiated technologies and a strong and highly experienced
management team. We are pleased to welcome the Niacet team to Kerry
and we are excited at the potential the combination of our two
businesses offers to outperform in this important and attractive
market."
Kelly Brannen , CEO and significant minority owner of Niacet,
commented "We are proud of the rich heritage we have built in
Niacet, dating back to when my family purchased Niacet in 1978.
This transaction affirms the reputation we have developed as a
trusted industry leader with a long-dated track record of making
the highest quality products in the market. Our constant focus on
innovation has been key to the development and success of our new
clean label products. I'd like to thank our employees for their
dedication and commitment and SK Capital for its support throughout
its ownership period. In partnership, we have strengthened and
grown the company substantially, while establishing the next phase
of Niacet's growth. We view the sale to Kerry as a perfect fit. It
will allow Niacet to grow at a much faster rate and sell in new
markets around the world. We are very pleased to become part of the
Kerry family."
Strategic Rationale
-- Niacet is a global market leader in technologies for preservation
o Over 80 years' experience in organic acids
o Global leadership in Bakery and Pharma
o Highly cost-effective portfolio of conventional and clean
label low-sodium preservation systems for Meat and plant-based
foods
-- Strongly aligned with Kerry's food protection and preservation strategy
o Niacet's leadership in conventional organic acids complements Kerry's focus on clean label
o Enhanced portfolio to address customer needs across clean
label, conventional and combined solutions
o Significant revenue synergy opportunities through combining
products and process technologies to enable above-market growth in
preservation
-- Significant consumer and market demand for preservation
o Increasing consumer focus on food safety and the environmental impact of food waste
o Market for food protection and preservation solutions
projected to grow at mid-single-digit rate
o Growing demand for plant-based foods requiring new food safety and shelf life solutions
-- Extends and accelerates Kerry's sustainable nutrition impact
o Broadens Kerry's portfolio of preservation technologies
enabling greater reach and solution delivery across key food waste
categories
o Partner of choice for food safety and shelf life extension
across clean label and conventional preservation
Transaction Details
The transaction is expected to close by the end of the third
quarter of 2021 subject to customary closing conditions and
regulatory approvals. The transaction will be funded via a
combination of existing liquidity and a dedicated bridge facility.
The bridge facility will be repaid out of proceeds from the sale of
Kerry Consumer Foods' Meats and Meals business for approximately
EUR819m per the announcement on 17 June 2021, which is expected to
complete in the fourth quarter of 2021. The net impact of the two
transactions on Kerry's net debt to EBITDA ratio for the year ended
31 December 2021 will be minimal.
About Kerry Group
Kerry is the world's leading taste and nutrition partner for the
food, beverage and pharmaceutical industries. We innovate with our
customers to create great tasting products, with improved nutrition
and functionality, while ensuring better impact for the planet. Our
leading consumer insights, global RD&A team of 1,000+ food
scientists and local manufacturing footprint in 31 countries enable
us to co-create with our customers across over 150 countries. At
Kerry, we are driven to be our customers' most valued partner,
creating a world of sustainable nutrition, and will reach over 2
billion consumers with sustainable nutrition solutions by 2030. For
more information, vi sit www.kerrygroup. com.
Disclaimer: Forward Looking Statements
This Announcement contains forward looking statements which
reflect management expectations based on currently available data.
However actual results may differ materially from those expressed
or implied by these forward looking statements. These forward
looking statements speak only as of the date they were made, and
the Company undertakes no obligation to publicly update any forward
looking statement, whether as a result of new information, future
events or otherwise. No representation or warranty is given as to
the achievement or reasonableness of, and no reliance should be
placed, on any such forward looking statement contained in this
Announcement. No statement in this Announcement is intended as a
profit forecast or a profit estimate. No such statement should be
construed or interpreted to mean that earnings or earnings per
share of Kerry will necessarily be greater or lesser than those for
the relevant preceding financial periods for Kerry.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014. The
person responsible for making this announcement is Ronan Deasy,
Group Company Secretary of Kerry Group plc.
(1) The cash consideration of EUR853m is based on a prevailing
exchange rate of $1.19: EUR1.
CONTACT INFORMATION
=============================================
Investor Relations
Marguerite Larkin , Chief Financial
Officer
+353 66 7182292 | investorrelations@kerry.ie
William Lynch , Head of Investor
Relations
+353 66 7182292 | investorrelations@kerry.ie
Media
Catherine Keogh , Chief Corporate
Affairs & Brand Officer
+353 45 930188 | corpaffairs@kerry.com
Website
www.kerrygroup.com
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