Nomad Foods has entered into exclusive talks with Croatian food producer and retailer Fortenova Grupa to acquire its frozen food business.
Fortenova's 'Frozen Food Business Group' (FFBG) frozen food portfolio includes a number of popular brands in the Balkan region, including Ledo in Croatia, Frikom in Serbia (pictured) and Ledo Citluk in Bosnia and Herzegovina.
The acquisition of FFBG would 'extend Nomad’s portfolio into new and developing European markets, while also creating a beachhead for potential future consolidation within Central and Eastern Europe', the Birds Eye owner said in a statement.
According to Fortenova Group CEO Fabris Peruško, a multi-party due diligence process for FFBG has been successfully completed, with negotiations now set to continue with Nomad Foods, “who have so far proved to be an extremely strong potential partner”.
Peruško added that the business' ultimate goal is to conclude a transaction with a strategic partner that will make the maximum contribution to the further development of FFBG.
Peruško expects the next phase of the FFBG sale process will be completed by the end of the first quarter of this year, with the signing of a sale and purchase agreement. In this case, the transaction could be completed, subject to regulatory approvals, as early as summer 2021.
“This transaction is part of the process of the capital structure optimisation that will enable the further development of the Fortenova Group. [...] We will continue to keep our people and the market informed of further developments in a timely manner," said Peruško.
In a statement, Nomad Foods added that the discussions are 'preliminary' and there can be no assurance that a transaction will be completed.
The value of the binding bid that is now 'on the table' has not been announced, but last year Croatian media reported that Leda's target valuation could be around €600 million, or 10 to 12 times EBITDA.
UK-based Nomad Foods' brand portfolio includes Birds Eye, Findus, iglo, Aunt Bessie's and Goodfella's, among others.
© 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