Kerry Group Acquires Preservatives Maker Niacet for EUR853m

Irish food firm Kerry Group has announced the acquisition of Hare Topco, trading as Niacet, for EUR853m on a cash-free, debt-free basis.

Niacet is a global market leader in technologies for preservation. Kerry Group said it has “clear leadership positions” in bakery and pharma, and cost-effective low-sodium preservation systems for meat and plant-based food.

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 more than 75 countries and key manufacturing sites in Niagara Falls in the United States and Tiel in the Netherlands.

The transaction is expected to close by the end of the third quarter of this year 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 about €819 million per its announcement last week, which is expected to complete in the fourth quarter of the year.

For the year ended December 31st, 2021, Niacet is expected to have pro-forma annualized revenue of about USD220m and earnings before interest, taxes, depreciation and amortization (ebitda) of about USD66m, representing a margin of about 30%.

Following the acquisition, Niacet will be integrated into Kerry’s global food-protection and preservation platform. Kerry Group said 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.

Edmond Scanlon, chief executive of Kerry Group, said: “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.”