Turkish confectionery company Kervan Gida, which completed a US$60m IPO in December, has used some of the proceeds to acquire a majority stake in a peer in Poland – ZPC Otmuchów.

The deal by the Istanbul-based owner of the Bebeto sweets brand also includes a minority holding in the ZPC Otmuchów subsidiary PWC Odra.

Kervan Gida said it used 55% of the IPO proceeds to invest in the two businesses via its own subsidiary Kervan International, acquiring the stakes from private-equity firm Warsaw Equity Management and other, unnamed minority shareholders.

Warsaw-listed ZPC Otmuchów had a turnover in the year ended 31 December 2020 of EUR50.4m (US$61.2m), while PWC Odra generated EUR49.9m, with that figure from 2019, according to a statement announcing the deal. The companies have four manufacturing plants between them employing 600 workers, and both supply branded products to retailers such as soft sweets, chocolate, marshmallows, fruit bars and savoury snacks, as well as for own-label customers.

Kervan Gida’s CFO, Adem Demir, said the stake in ZPC Otmuchów amounts to between 64.36% and 65.29%, equating to EUR23.5m. It is paying EUR3.8m for a 26.95% holding in PWC Odra. The transaction is expected to close by the end of the current quarter. 

Oguz Ay, Kervan Gida’s head of sales and marketing, said: “We aim to create significant regional synergies in producing and selling soft candy products through ZPC Otmuchów and its subsidiary PWC Odra’s production capacities, distribution channels and existing customer base.”

In 2017, Kervan Gida bought UK sweets maker Dexters Confectionery, based in Chichester, south-west England. The unit distributes its namesake brand, and the Bebeto line, to more than 12,000 retailers in the country.

Stuart Johnston, the managing director of the UK unit, added: “We’re delighted with the recent news of the company’s latest acquisition. Our UK business has grown by 25% alone in the past 12 months; we strongly believe that investment in the European market will be extremely fruitful and that it will go a long way to strengthen our brand value.”

Kervan Gida has a production plant in Istanbul and another in Akhisar, a town in Manisa province in west Turkey. It also has facilities in the US, Germany and Russia, and exports to 85 countries.