NORWAY/LATVIA: Orkla eyes Baltic boost with NP Foods buy
Orkla has announced the acquisition of NP Foods Group
Norway's Orkla has said it is hoping to boost its presence in the Baltic states with the acquisition of Latvia-based food manufacturer NP Foods Group.
Orkla has moved to buy NP Foods, which sells products including confectionery, cakes and soft drinks, from Denmark-based group Nordic Food Partners for an undisclosed sum.
NP Foods' portfolio includes the brands Laima - which has a 30% market share of the Latvian chocolate market - Staburadze cakes and Gutta soft drinks.
Orkla said the acquisition will "nearly double the scale" of its operations in the Baltic and make it "one of the largest consumer goods companies in the region".
NP Foods has four factories in Latvia and one in Lithuania. It had a consolidated turnover of EUR77.1m (US$101.7m) in 2013, with an EBITDA of EUR7.5m, Orkla noted.
"The acquisition of Laima and other well-established brands is strategically important to Orkla, and will significantly strengthen our foothold in the region," Orkla president and CEO Peter Ruzicka said.
The move is intended to boost Orkla's presence in the Baltic biscuits, cakes, juice, water and ready meal markets.
"We have a strong portfolio of local brands with leading market positions. The newly acquired companies are a good strategic fit for Orkla, and will strengthen our position as the leading consumer goods company in the region," Christer Åberg, CEO of Orkla's confectionery and snacks business, said.
Orkla has entered into an agreement with Nordic Partners Food Limited to purchase NP Foods Group.
NP Foods Group includes the companies and brands Laima, Staburadze, Gutta, Margiris and Staburadzes Konditoreja.
The acquisition will nearly double the scale of Orkla’s Baltic operations, making Orkla one of the largest consumer goods companies in the region.
“With a history dating back more than 140 years, Laima is one of the strongest confectionery brands in the Baltic region. The acquisition of Laima and other well-established brands is strategically important to Orkla, and will significantly strengthen our foothold in the region,” says Orkla President and CEO Peter A. Ruzicka.
The iconic chocolate brand Laima has a market share of more than 30% in the Latvian chocolate market. The local Selga, Staburadze, Gutta, Everest, Fresh Walk and Pedro brands will also boost Orkla’s presence in the Baltic biscuits, cakes, juice, water and ready meal markets.
Orkla is already represented in the Baltic region through the branded consumer goods companies Spilva and Latfood (Latvia), Kalev and Põltsamaa Felix (Estonia) and Suslavicius-Felix (Lithuania), which hold solid market positions in the confectionery, ready meals and ketchup segments.
“We have a strong portfolio of local brands with leading market positions. The newly acquired companies are a good strategic fit for Orkla, and will strengthen our position as the leading consumer goods company in the region,” says Christer Åberg, CEO of Orkla Confectionery & Snacks.
“Orkla’s acquisition of NP Foods gives us access to new technology, in-depth expertise and a well-documented food and product safety system. This will allow us to develop our long-established brands further and open up new opportunities for the company,” says NP Foods CEO Rolands Gulbis.
NP Foods had a consolidated turnover of EUR 77.1 million in 2013, with a normalised operating profit (EBITDA) of EUR 7.5 million. The company has four factories in Latvia and one in Lithuania, and a total of 1,100 employees.
Under the acquisition agreement, Orkla will purchase 100% of the shares in the companies held by Nordic Partners Foods Ltd*, which is owned by the Latvian investment company Nordic Partners and the Icelandic fund BIL ehf.
Completion of the transaction is subject to approval from the Latvian, Lithuanian and Estonian competition authorities. By mutual agreement, the purchase price is not being disclosed at this stage.
Original source: Orkla
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