Cerealto has taken a majority stake in fellow co-manufacturer Fresca Foods, marking the Spanish group’s expansion into the US market.
Investor-backed Cerealto said the transaction will boost both companies’ “capabilities in high-growth snacking segments”.
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Colorado-based Fresca Foods’ management will continue to manage the business, which will retain a “significant shareholding”, according to a statement where the financial details were not disclosed.
Upon completion of the deal, North America will represent 20% of Cerealto’s annual revenues, which were put at €526m ($605.2m).
Backed by Davidson Kempner Capital Management and Afendis Capital Management, Cerealto is currently focused on markets in Europe, the UK and Mexico. As well as acting as a co-manufacturer of biscuits, cereals and snack bars, the company also produces for private-label customers, including major retailers.
Fresca Foods, meanwhile, produces snack bars, granola, breakfast cereals, crackers and cookies on a contract basis.
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By GlobalDataBosco Fonts, the CEO of Cerealto, said in the statement: “Partnering with Fresca Foods’ leadership team gives us a strong foothold in the world’s largest snacking market, shifting our business from predominantly European to truly international.
“The US organic snacking category is already valued at around $32 billion and is projected to grow at more than 6% annually, so this is a huge opportunity to expand our footprint globally.”
Cerealto’s tie-up with Fresca Foods “accelerates the scaling of manufacturing and innovation platforms”, the statement read, which added the Spanish business operates ten production plants in four countries employing 3200 staff.
Last year, Cerealto acquired Hill Biscuits in the UK from private-equity firm LDC. When that deal was announced, the company said it had nine production facilities in Spain, Portugal, Italy and Mexico.
Asked for clarification on the number of plants before and after the transaction, a spokesperson for Cerealto told Just Food the company currently operates ten manufacturing facilities – six in Spain, two in the UK based at Worksop and Ashton-under-Lyne, one in Portugal and one in Mexico.
The acquisition of Fresca Foods will add two more but in the US, located at Boulder County in Colorado and Denver. Annual revenues at the acquired business are €97m, the spokesperson confirmed.
Brandon Viar, the CEO of Fresca Foods, said in the statement: “Together with Cerealto, we have the platform, expertise and shared ambition to accelerate growth as the leading co-manufacturing and private-label snacking partner. We are truly excited for this next chapter in Fresca’s journey…”
