Nomad Foods’ appetite for frozen food companies continues to grow. After acquiring Iglo Foods Holdings Ltd. earlier this year for EUR 2.6 billion ($2.9 billion), the Tortola, British Virgin Islands-headquartered investment vehicle announced on August 13 that it intends to buy continental Europe operations of the Findus Group for approximately £500 million ($781 million).
The latest deal, an agreement with seller LionGem Sweden 1 AB, gives Nomad an option to acquire Findus Sverige AB and its subsidiaries in Sweden, Norway, Finland, Denmark, France, Spain and Belgium. From fish dishes and ready meals to vegetables and potato products, the operations include the intellectual property and commercialization rights to the Findus, Lutosa, and La Cocinera brands in their respective markets. The remaining part of the Findus Group, including Young’s Seafood Limited in the UK, is not part of the transaction.
The £400 million cash portion of the purchase price is expected to be funded through a combination of Nomad’s cash in hand and debt. Additionally, the seller will be issued approximately 8.4 million ordinary shares of Nomad when the deal closes.
Through this transaction, Nomad will acquire leading frozen food businesses with approximately 1,500 employees and six manufacturing facilities in Norway, Sweden, France and Spain, as well as the intellectual property and commercialization rights. Annual revenues are roughly EUR 600 million, with an adjusted EBITDA margin of about 11%. The acquisition is expected to be immediately accretive to Nomad’s earnings with approximately EUR 25 million to 30 million of annual synergies targeted over the next three years.
Through Iglo Foods Holdings Limited and its subsidiaries, Nomad currently operates Findus in Italy. Thus the consummated deal will create a pan-European food business and further reunite the brand across the continent.
“This will enable Findus to move forward as a more unified brand and will support efforts to drive innovation, introduce new meal options, and conduct marketing initiatives aimed at bringing more consumers across Europe to the frozen foods aisles,” said Nomad in a statement issued on August 13.
Stéfan Descheemaeker, Nomad’s chief executive officer, commented: “This transaction, in line with our growth strategy, is an exciting addition to our portfolio and a significant milestone in reaching our goal of building a global consumer foods company. While the operations we are acquiring are strong, attractive assets on their own, combining them with our existing businesses creates a unique value proposition and unlocks new growth opportunities.”
Noam Gottesman and Martin E. Franklin, Nomad’s co-chairmen and founders, issued a joint statement as follows: “Curating a portfolio of market-leading consumer foods companies remains our core objective and this acquisition furthers our long-term commitment to growing the frozen food sector in Europe through ongoing investments in brands, innovation, and product development. This transaction builds on the positive momentum generated by Stéfan and the Iglo Group team, and we are excited to welcome the Findus employees to the Nomad family. The addition of these businesses is transformative to Nomad as it augments our product offering, customer reach, and geographic footprint, further solidifying our leadership position in Europe’s fragmented frozen foods sector.”
James Hill, chief executive of Findus Group, said: “This transaction represents a strategic milestone for Findus and is a positive development for the European food industry as a whole. The new group will be bigger, stronger, more efficient and more innovative than its component parts, offering significant benefits not only to consumers, but to all of our stakeholders. I am confident this is an ideal way for Findus to sustain the growth of recent years.”
The seller can exercise its option following the completion of works council consultations in France and closing of the acquisition will be subject to certain regulatory approvals. If not exercised within five months, the option will lapse and LionGem Sweden 1 AB will be obliged to pay a break fee of £15 million. If after exercise of the option Nomad is not able to raise sufficient financing to complete the acquisition, the seller will be entitled to a reverse break fee of approximately £34.2 million.
