Nomad Foods has emerged as the buyer of Croatia-based Fortenova Group’s frozen-food business that were on the market and over which the UK-headquartered company had been in exclusive talks to acquire.
The purchase price has been set at GBP615m (US$850.1m) on a debt- and cash-free basis, Nomad Foods, which supplies the UK and European markets, said today (29 March), adding the deal will take the company into the ice-cream sector for the first time.
Based in the Croatian capital of Zagreb, Fortenova is the restructured successor to Agrokor, which was the largest consumer goods business in the Balkans before it was put into state administration in 2017 amid accusations of fraud against its founder Ivica Todoric. Fortenova emerged from the process in 2019 backed by Agrokor’s creditors.
Ledo, Ledo Citluk and Frikom make up most of the frozen-food brands Nomad will acquire from the deal, and with it, the company enters new markets in Croatia, Serbia, Bosnia and Herzegovina, Hungary, Slovenia, Kosovo, North Macedonia and Montenegro.
Stéfan Descheemaeker, Nomad’s CEO, said ice cream represents about 50% of Fortenova’s frozen-food business and will account for around 5% of combined annual revenues. The category also provides the UK firm with seasonal variations to its portfolio of savoury foods sold under the Birds Eye, Findus and Iglo brands.
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Nomad chairman and founder Noam Gottesman added: “We are delighted to announce this acquisition, which is consistent with our growth strategy and builds on our five-year track record of top-tier shareholder value creation. This transaction provides a natural extension to our existing business and creates a new platform for future expansion within central and eastern Europe.
“It also introduces us to ice cream, an exciting new category which opens new potential avenues for growth.”
Nomad noted the management of the frozen-food assets it will acquire expects the business to generate organic growth in the mid-single digit range, “double” its own 2-3% organic growth, while annual revenues will increase to EUR3bn (US$3.5bn) from the EUR2.5bn recorded in the year ended 31 December 2020.
The UK firm also owns the Aunt Bessie’s frozen brand. It confirmed in January that the company was in exclusive talks with Fortenova following reports Nordic food group Orkla was interested, along with a combination of two investment companies – Prague-based Emma Capital and the Czech-Slovak firm J&T Finance Group.