Bakers in €50m Danish splurge

Irish-Swiss baked goods producer, Aryzta has strengthened its presence in Scandinavia, via the acquisition of Danish firm, Mette Munk for an estimated €50m.

While Aryzta was not commenting on the matter, yesterday, it is understood that the deal represents a relatively small purchase on its behalf; although it will significantly strengthen the group’s presence in the Scandinavian market and give it access to Denmark’s specialist pastry production sector.

Currently, Aryzta — which was established via the 2008 merger of IAWS and Swiss group, Hiestand — provides product to Denmark’s quick service restaurant sector.

Mette Munk exports frozen pastries and tarts and has annual profits of around €5m; while revenues have increased by nearly 30% in the past five years.

The company — which is also undergoing a €70m overhaul of its production facilities — is the market leader in Denmark and exports more than 50% of its products to the rest of Scandinavia, Britain and the US. The deal also includes the business of Nordic Bake-Off.

Cuisine de France and La Brea bread owner, Aryzta recently stated that financial discipline and strong cash generation will remain its key strategies, but hinted at its ability to partake in increased consolidation opportunities in the baked food market.

Liam Igoe, food analyst with Goodbody Stockbrokers, said the Danish deal should be marginally earnings per share accretive and cost the Zurich and Dublin-listed firm, around €50m, when debt is added to the equation.

Mr Igoe also said that Aryzta is expected to continue acquiring new firms, in Iberia, northern Europe and North America.

“The acquisition [of Mette Munk] would be consistent with what we suggested in our recent food report, when we indicated that Aryzta would seek in-fill acquisitions in Scandinavia, among other places,” he said.