Feltham, England-based Nomad Foods Limited announced on January 17 that it has entered into an agreement to acquire Green Isle Foods’ Goodfella’s and San Marco frozen pizza brands from a subsidiary of Boparan Holdings Ltd. for approximately €225 million. The deal includes two production plants in Ireland, but excludes other units of the Green Isle portfolio, which range from Donegal Catch frozen fish and seafood to Galway pies and pastries, and Green Isle vegetables and potato products.
Established in 1993 as an “original Italian-American” pizza line, Goodfella’s holds number one and number two market share positions within the frozen pizza category in Ireland and the United Kingdom, respectively. Its extensive line runs the gamut from Stonebaked, Takeaway and Thin & Crispy varieties, to Deep Pan, Deli, Gluten-free and other offerings.
The acquisition also includes a logistics arm in Ireland and a sales platform in the UK, as well as private label contracts with major retail chains.
“Goodfella’s creates a new and exciting growth avenue into frozen pizza, a strategic category that is both sizable and complementary,” said Nomad Foods CEO Stefan Descheemaeker. “We have a strong foundation in place and are well positioned to create shareholder value as we apply our proven toolkit of capabilities to Goodfella’s pizza and further develop our portfolio of iconic, market-leading brands.”
Those brands include Bird’s Eye, Iglo and Findus, which were brought under Nomad Foods banner after billionaire venture capitalists Noam Gottesman and Martin Franklin established the holding company in 2014. Active in 17 countries, it ranks as the retail branded frozen food market leader in Western Europe.
Co-Chairman Gottesman commented: “Over the past few years, Stefan and the team have successfully integrated two of Europe’s largest frozen food businesses while strengthening the core product offering. With strong organic revenue growth momentum, the time is right to expand into new strategic categories such as pizza, which offer adjacent avenues for further growth and synergies. The Goodfella’s brand and team broaden our product offering and customer reach, and solidify our market leadership within the United Kingdom and Ireland.”
Nomad Foods expects the acquisition to be immediately accretive to adjusted EBITDA and adjusted earnings per share and, within two years post-closing, contribute approximately €150 million revenue, €22 to €25 million adjusted EBITDA, and €0.08 to €0.09 adjusted earnings per share.
The deal is expected to be funded through cash on hand, and it is anticipated that the transaction will be completed in the first quarter of 2018, subject to certain closing conditions.
In addition, Nomad Foods now figures that 2017 adjusted EBITDA to be approximately €328 million versus the prior expectation of approximately €325 to €327 million, and organic revenue growth of approximately 5% for the fourth quarter of 2017 versus prior guidance of approximately 3%.
The company will report numbers for the three-month period ended December 31, as well as audited full year 2017 financial results in March.
On the seller’s side of the ledger, the deal represents what its chief executive described the “first major step for 2 Sisters to transform and build a better business.” Net proceeds from the sale will be used to repay debt and to invest in the group’s core businesses.
Ranked as Britain’s second largest food company, the 2 Sisters Group dealt with a wave of negative publicity last year after ITV News and The Guardian newspaper reported that one of its fresh chicken processing facilities in England engaged in unhygienic practices. The investigation led to a parliamentary enquiry during which owner Ranjit Singh Boparan assured that steps would be taken to enhance surveillance and inspections.