Cloetta has inked a deal to acquire Locawo, a Dutch manufacturer of fudge, nougat and chocolate under the Lonka brand, in a move the confectioner said will "significantly" strengthen its position in the Netherlands.
Locawo’s sales amounted to about SEK300m (US$35m) in 2014. The Netherlands accounted for about half of the sales, while the Nordic countries and the UK are other important markets, Cloetta revealed. Approximately 50% of the group's sales are branded, with the rest from the pick and mix and contract manufacturing.
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"Lonka is a well-known brand that will significantly strengthen Cloetta’s positon in the Netherlands. The acquisition will diversify Cloetta’s product range into new technologies and categories including the Dutch chocolate market. It will also create cost synergies, thereby over time supporting Cloetta’s EBIT-margin target of 14%. In addition, there are long term revenue synergies that can be realised", said David Nuutinen, incoming CEO of Cloetta.
Aime de Bock, CEO of Locawo, added the acquisition will be beneficial to the Lonka brand. "With Cloetta’s focus on brands and strong routes-to-market, especially in the Netherlands, I am convinced that we will be able to further strengthen the Lonka brand."
Cloetta will pay SEK295m in cash for Locawo and the acquisition will be financed utilising Cloetta’s existing credit facilities, the company revealed.
Locawo operates two factories in the Netherlands, one in Roosendaal and one in Dieren. The group has 130 employees.
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By GlobalData
