Kerry Group to sell sweet ingredients division for €500m

The combination of IRCA and Kerry’s Sweet Ingredients Portfolio is expected to create around €1bn in revenue

CEO of Kerry Group, Edmond Scanlon. Picture Colm Mahady / Fennell Photography.

Food giant, Kerry Group has entered negotiations to sell the trade and assets of its Sweet Ingredients Portfolio to IRCA for €500m. 

The global company is an international leader in chocolate, creams, and other high-quality semi-finished food ingredients.

With a sale price comprising of an initial cash consideration of €375m plus a €125m interest-bearing vendor loan note, the unit being sold has four manufacturing facilities in the US with an additional six facilities across the UK, the Netherlands, Germany and France.

The potential sale to IRCA is subject to relevant regulatory approvals and routine closing adjustments, Kerry Group has said, adding that employee consultation and information processes have commenced in relevant jurisdictions.

Speaking on the negotiations, CEO of Kerry Group, Edmond Scanlon said, "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."

The group's Sweet Ingredients Portfolio incorporates numerous products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées, with the division's expected attributable financial results for 2022 including revenues of €405m and EBITDA of €41m.

Massimo Garavaglia, CEO of IRCA, called the Sweet Ingredients Portfolio a high-quality business with a differentiated set of technologies, adding, “We are delighted to partner with Kerry on this transaction and look forward to its successful conclusion.

"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."

The combination of IRCA and Kerry’s Sweet Ingredients Portfolio is expected to create a global leader in semi-finished food ingredients with around €1bn in revenues, with the CEO of IRCA backer, Advent Capital saying:

"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 Potential Sale is expected to close in the first half of 2023 following the employee consultation and information processes and receipt of regulatory approvals.