Fyffes buy 60% of Swedish fruit distributor, Everfresh, in €30m deal

FRUIT importer Fyffes has splashed out nearly €30 million to buy one of Sweden's biggest fruit distributors.

The company will take a 60% stake in Everfresh, which has a 25% share of the Swedish fruit market and recorded pre-tax profits of €4.4 million last year.

Fyffes chairman Carl McCann said the acquisition gave the company a significant opportunity to grow and was an extension of Fyffes' strategy of buying strong businesses in the fruit sector. "Everfresh is one of the leading fresh produce groups in the Swedish market. It is a highly mechanised, efficient, low-cost operator that adds significant value for its customers," he said.

Fyffes will fund the purchase from its substantial cash reserves, which stood at €172 million at the end of last year. It will acquire the remaining 40% of Everfresh in 2007 and will pay between €25 million and €50 million, depending on Everfresh's performance.

The acquisition will strengthen Fyffes' presence in the region and complement the group's existing operation in Denmark. Scandinavia will generate revenues of €500m for Fyffes after the acquisition, representing almost a quarter of the group's total sales.

Everfresh chief executive Bengt Nilsson said becoming part of the Fyffes group was an important step in the company's development and would strengthen its position. Everfresh was set up in 1987 and employs 315.

It distributes fruit to retail chain stores and wholesalers from four bases in Sweden and one in Finland.

Fyffes said the acquisition would be earnings-enhancing immediately. The group has said it is capable of concluding deals worth up to €500m and spent €4m on advisory fees relating to an aborted takeover last year. The group has come under pressure to maximise the benefit of its cash pile, which has earned less interest income in recent years as deposit rates fell steadily.

The transaction announced yesterday will be completed within two months and is subject to a small number of conditions.