Cloetta Broadens Product Portfolio Through Acquisition
Confectionery group Cloetta has signed an agreement to acquire Alrifai Nutisal, a leading Swedish company within dry roasted nuts. The acquisition is in line with Cloettas’s strategy to broaden its product portfolio within Munchy Moments.
“I am very happy to announce a significant step in to a new category in our home markets with the acquisition of Nutisal. Cloetta will now be able to offer consumers a new Munchy Moment with an established brand in the growing nuts segment. Cloetta’s strong route to market combined with the market growth in the category should facilitate significant growth going forward,” says Bengt Baron, chief executive of Cloetta.
The acquisition will support profitable growth by expanding Cloetta into adjacent categories, but will generate only limited synergies within existing sales, administration and logistics.
The upfront purchase price is SEK110 million ((Eur12 million) in cash with a potential earn-out based on certain targets related to the results of Nutisal for 2016. The earn out is maximum SEK300 million in cash. The acquisition will be financed through Cloetta’s existing credit facilities.
The acquisition is expected to generate an additional growth in sales of approximately 1 per cent on a group level in the next few years. It will require exceptional restructuring cost of approximately SEK10 million in 2014. The acquisition will, in 2014, have a very limited effect on Cloetta’s operating profit as the company is in a growth phase. However, the acquisition is expected to be EPS accretive in 2015.
Alrifai Nutisal produces and sells dry roasted nuts under the brand Nutisal, primarily in the branded bags segment. It was established in Sweden in 2007 and has yearly sales of about SEK200 million, with about 60 employees. Today, Sweden accounts for about half of the sales, but Nutisal is also sold in Denmark, Norway, Germany, UK and the Benelux countries. Nutisal holds a number two position in the branded nuts market in Sweden. Nutisal is currently distributed through an own sales force in Sweden and through distributors on the other markets.
Nutisal nuts are dry roasted, using unique knowledge and technology. The dry roasting enhances the ‘real’ taste of nuts and offers a unique ‘crisp’ to the products. All products are produced in a new (established in 2007) factory in Helsingborg, Sweden.
The seller is Arval Holding, a company controlled by the Al Rifai Group, a leading Lebanese nuts company dating back to 1948. Al Rifai Group is 35% owned by Qatar First Bank.
The acquisition is due to be completed by early January 2014.
