The Grocer – 17 August 2019

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Hand-cooked crisps brands have been struggling, having to resort to deep discounting

Valeo Foods close

to securing deal for

Kettle UK & Ireland

Elena Cherubini

Irish company Valeo

Foods has entered exclu-

sive talks to acquire pre-

mium crisps maker Kettle

Foods’ operations in the

UK and Ireland.

City sources have con-

firmed to The Grocer the

businesses are close to

striking a deal, expected

to be worth over £50m.

The Metcalfe’s and

Kettle Crisps owner’s

assets in the US, or other

markets, are not included

in the transaction.

Kettle’s US owner

Campbell Soup Co

appointed Barclays to

lead the sale earlier this

year after the operation

plunged into the red,

posting a pre-tax loss of

£4.4m in the period from

1 January to 31 July 2018.

The premium crisp

maker was bought by

Campbell’s in a wider

$4.9bn (£3.7bn) deal

from its previous owner

Snyder’s-Lance in

December 2017.

Kettle was a “logical

deal” for the CapVest-

owned company as it

looked to build a portfo-

lio of domestic brands,

said one City source. “It

is a nice medium-sized

business that fits into

Valeo’s portfolio, doesn’t

overly dominate it, but is

not so small it would get

swamped.”

The hand-cooked

crisps sector has been

struggling lately, with

brands – including Kettle

• having to resort to high
  levels of discounting.
  However, buying busi-
  nesses requiring “some
  kind of turnaround” rep-
  resented the “perfect sce-
  nario” for Valeo, added a
  further industry source.
  “That is exactly what

they look for in almost all

of their deals. They are

very operationally heavy

and happy to get their

hands dirty.

“When you combine

something that is not

going to fetch a super-

high price, because it is a

trophy asset, with some-

thing that needs a bit

of work in a brand like

Kettle, which is still a fab-

ulous brand even though

it has been performing

poorly recently, that is

perfect for Valeo.”

Valeo has been lead-

ing a string of acquisi-

tions in the fmcg sector

since its foundation in

2010, including the take-

over of confectionery

businesses Big Bear and

Tangerine in 2017 and

2018 respectively.

Kettle, Valeo and

Campbell’s all declined

to comment.

Annual sales rose 4.3% in
the year to September ‘

Young’s Seafood posted
a further £10m pre-tax
loss in its financial year
before being acquired
by CapVest, but sales
and underlying profits
improved as turnaround
progress continued.
Newly filed accounts at
Companies House show
Young’s annual sales
rose 4.3% in the year
to 30 September 2018
to £545.9m, reflecting
increasing sales of frozen
and chilled products.
Young’s said frozen
sales were driven by

Young’s posts £10m

loss but sales and

underlying profits up

improved performance

in the UK, own-label

contract wins and ris-

ing exports. Chilled sales

were also up, driven by

market growth, new list-

ings and “strong cus-

tomer activity”.

EBITDA rose 16% to

£23m for the year, while

operating profits before

exceptional items and

amortisation were up

35% to £11.5m.

However, £18.1m of

exceptional costs, includ-

ing £11.1m of restruc-

turing costs primarily

related to the closure of

its Pinneys site in Annan,

led to overall pre-tax

losses of £10.2m in the

period. Young’s was hit

by £7.7m of contractual

payments, £2.7m related

to stock writedowns and

disruption as well as sep-

arate fixed asset impair-

ments of £7m.

Fruitapeel makes fruit and

confectionery sauces

Fruit and confectionery
sauce maker Fruitapeel
saw sales and profits con-
tract in its first financial
period under the owner-
ship of Belgian confec-
tionery group Puratos, as
it invested in longer-term
post-acquisition growth.
Sales decreased 6%
on a like-for-like basis to
£10.7m in the 10 months
to 31 December 2018 com-
pared to £13.6m in the
12 months to the end of
February 2018.
The reduction in sales,
accompanied by rising
staff and input costs,
led to a 62% decline

Fruitapeel profits

fall under Puratos

in like-for-like operat-

ing profit. Puratos UK

finance director Panos

Papapanagiotou said:

“The results reflect

where we have cho-

sen to invest and sta-

bilise the business

post-integration.”