Kerry to sell sweet ingredients business to PE firm Advent for €500m

Kerry Group has announced that it has entered into negotiations to sell the trade and assets of its Sweet Ingredients Portfolio to private equity firm Advent International’s portfolio company IRCA for €500m (£443m).

IRCA is an international leader in chocolate, creams, and other high-quality semi-finished food ingredients. Advent acquired IRCA in July last year.

Kerry’s Sweet Ingredients Portfolio is a leading manufacturer of sweet and cereal products with a broad range of technological capabilities, primarily serving the end markets of bakery, cereal, confectionery, dairy and ice cream in Europe and the US.

It has four manufacturing facilities in the US, and six facilities across the UK, the Netherlands, Germany and France. The portfolio incorporates a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées. The expected attributable financial results for the year ended 31 December 2022 include revenues of €405m and EBITDA of €41m.

“We are pleased to have entered exclusive negotiations with IRCA, who have a strong track record of developing their business within the category. This transaction would represent another strategic development in Kerry’s evolution, as we continue to look to enhance and refine our Taste & Nutrition portfolio, aligned to the areas where we can create the most value,” Edmond Scanlon, Kerry Group chief executive, commented.

Massimo Garavaglia, IRCA chief executive, added: “We are delighted to partner with Kerry on this transaction and look forward to its successful conclusion. The Sweet Ingredients Portfolio is a high-quality business with a differentiated set of technologies, and we are excited to welcome their talented team who, we believe, share our passion and drive to deliver the best for their customers and consumers.

“This acquisition would represent a strong fit with our portfolio, with its highly complementary product and technological capabilities, and help us to become a truly global player. We look forward to helping the Sweet Ingredients Portfolio realise its full potential as part of the IRCA family.”

Francesco Casiraghi, managing director at Advent International, commented: “We are delighted to welcome this best-in-class sweet ingredients business to the IRCA family, which would represent a major step in our goal of creating a genuine global leader in semi-finished food ingredients. There are so many exciting long-term opportunities for this combination, and we look forward to supporting the management team in this next phase of growth for the business.”

The combination of IRCA and Kerry’s Sweet Ingredients Portfolio is expected to create a global leader in semi-finished food ingredients with around €1 billion in revenues, a truly international footprint and a significant presence in the US.

The deal would represent IRCA’s third acquisition since it was acquired by Advent, following the recent acquisitions of Anastasi Group, a leading Italian pistachio ingredients company, and of Cesarin SpA, a leading artisanal fruit-based ingredients company.

The potential sale is expected to close in the first half of 2023 following the employee consultation and information processes and receipt of regulatory approvals.