Fortenova Group has sold its Frozen Food Business Group (FFBG) to Nomad Foods for €615 million.
FFBG consists of the business units Ledo Plus (Croatia), Ledo Čitluk (Bosnia and Herzegovina) and Frikom (Serbia), in addition to several smaller affiliated companies.
It includes a portfolio of iconic local brands with strong consumer awareness in Croatia, Serbia, Bosnia & Herzegovina, Hungary, Slovenia, Kosovo, North Macedonia and Montenegro.
The two anchor brands, Ledo and Frikom, are leaders in many of these markets, offering a broad range of frozen food products including fish, fruits, vegetables, ready meals, pastry and ice cream.
Nomad and Fortenova first entered into talks about the sale of the division back in January.
Nomad Foods expects FFBG’s organic growth to be in the mid-single digits range, double the 2-3% organic growth profile of Nomad’s existing business.
It also sees an opportunity to expand FFBG’s adjusted EBITDA base by approximately 50%, partly driven by an estimated €15 million of annual run-rate synergies by 2024.
FFBG is expected to generate annual revenue and adjusted EBITDA of €279 million and €53 million, respectively, in 2021.
The acquisition of FFBG will expand Nomad’s portfolio into the region, while creating a strategic platform for further expansion within Central & Eastern Europe.
It will also enable Nomad to enter the ice cream category, which represents approximately 50% of FFBG’s revenues and will account for around 5% of the combined annual revenue base.
“The acquisition of FFBG reinforces Nomad’s European frozen food leadership while strategically expanding our portfolio into attractive new markets and creating an exciting new category adjacency in ice cream," commented Stéfan Descheemaeker, Nomad Foods chief executive. "Like Birds Eye, Findus and iglo, Ledo and Frikom are institutions in their respective markets with strong consumer awareness and #1 market share.
"Similar to Nomad, FFBG is singularly focused on frozen food, a fantastic category that is aligned with consumer trends including convenience and sustainability. We plan to leverage our combined pan-European scale, commercial expertise and passion for frozen food while harnessing the unique local characteristics and traditions of FFBG’s brands.”
The transaction is subject to regulatory approvals in the relevant markets as well as Fortenova Group’s shareholders’ approval and completion is expected in Q3 2021.
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine