UK: R&R Ice Cream to buy rival Fredericks Dairies
Acquisition of Fredericks will boost R&R Ice Cream's UK business
UK ice cream group R&R Ice Cream has agreed to acquire local rival Fredericks Dairies in a deal worth GBP49m (US$75m).
Fredericks Dairies has deals to manufacture ice cream and ice lollies sold under brands including Mondelez's Cadbury, Del Monte and Vimto.
The deal is subject to the approval of the UK's Office of Fair Trading. James Lambert, R&R's CEO and executive chairman, said the acquisition would Fredericks would provide "valuable additions" to its portfolio of branded products.
Lambert said: "It will also enable R&R to extend its successful partnership with Mondelez International into the UK. Fredericks is already launching a cone and 500ml super-premium tub under the Oreo brand and this acquisition will allow us to accelerate this successful innovation programme alongside our popular Nestle, Cadbury, Kelly's and Yoo moo brands."
Fredericks' owners - Frank and Philip Frederick - will keep their Freezeserve cold storage and distribution business, R&R said.
Fredericks generated sales of GBP45m in the year to 31 August 2012. Annual figures for R&R Ice Cream were not immediately available but for the nine months to the end of September its revenue was up 24.9% at EUR508m (US$662.3m). Adjusted EBITDA, which excludes one-off items, increased 36.7% to EUR81.7m. Net profit was EUR2.7m, compared to a loss of EUR11m a year earlier.
In recent months, there have been reports R&R has been put up for sale by its private-equity owners.
Last month, The Financial Times reported three private-equity firms, including PAI Partners, had put in a bid for R&R. Oaktree Capital owns 82% of R&R, with management including Lambert owning the rest of the business.
Oaktree formed R&R in 2006 when it acquired UK firm Richmond Foods and combined it with German peer Rocadin. R&R now has operations across Europe.
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