Valeo Foods Group’s Post

Big News in Food Manufacturing: Businesses Making Major Moves! 🚀 Tate & Lyle has agreed to acquire CP Kelco for $1.8 billion. This strategic move will enhance Tate & Lyle's expertise in sweetening, mouthfeel, and fortification. With @CP Kelco's leadership in pectin and speciality gums, the combined entity aims to capitalise on trends towards plant-based, clean-label, and sustainable ingredients. This acquisition aligns perfectly with Tate & Lyle’s growth-focused strategy and commitment to innovation. Meanwhile, Britvic plc has rejected a £3.2 billion takeover bid from Carlsberg Group. Britvic plc’s confidence in their future growth and market position is clear from this decision. By rejecting Carlsberg Group’s offer, Britvic aims to continue focusing on its strategic plans independently, signalling strong faith in its business model and prospects. What are your thoughts on these bold moves? How do you think they will impact the industry? Let’s discuss it! Read more: Link to articles in the comments #foodindustry #acquisition #businessgrowth #sustainability #innovation #strategicdecisions #tateandlyle #cpkelco #britvic #carlsberg

The growth continues

Crazy busy here at ZRG Partners, LLC but I still got you with my 𝑾𝒆𝒆𝒌𝒍𝒚 𝑺𝒖𝒑𝒑𝒍𝒚 𝑪𝒉𝒂𝒊𝒏 𝒖𝒑𝒅𝒂𝒕𝒆𝒔 on some 𝘊𝘗𝘎 𝘮𝘢𝘳𝘬𝘦𝘵 𝘯𝘦𝘸𝘴 across 𝘪𝘯𝘯𝘰𝘷𝘢𝘵𝘪𝘰𝘯, 𝘴𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘪𝘭𝘪𝘵𝘺, 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵, 𝘦𝘹𝘦𝘤 𝘮𝘰𝘷𝘦𝘴 & more! 💰Whirlpool Corporation plans further supply chain cost reductions circa $100M 👟 Nike to lay off more than 1,600 employees (2% of workforce) 🍺 Asahi UK hopes massive group restructure will enhance advantages across 4 key markets (Japan, EU, Oceania & South East Asia) 📰dsm-firmenich Personal Care to separate Animal Nutrition & Health in 2025 🚀Arla Foods UK reported a 2.4% YoY revenue increase in 2023 financial results 🐄 First Milk acquires manufacturer BV Dairy 📉 Kerry has reported its preliminary results for 2023, with revenue down 8.6% to just over £6.8M 💚 New £500M decarbonization fund open to manufacturers by Department for Energy Security and Net Zero Anything I've missed? 𝑪𝒐𝒎𝒎𝒆𝒏𝒕 𝒃𝒆𝒍𝒐𝒘! #supplychainnews #fmcgindustry #supplychainsustainability #supplychaininnovation #sustainablesupplychain

300 jobs. How many families is this? How much lost tax revenue? Curious how many times this story needs to repeat before we recognize the impact of local companies being bought by outside buyers? There’s a lot policy makers could do to shift things. Examples would include state incentives for ESOPs. Or tax CREDITS for companies with greater than 25% employees ownership. Or low-interest loans for company purchases by employees… See: Bob's Red Mill for a counter narrative and road map on how to keep wealth in a community. Or Organically Grown Company , which uses the perpetual trust model. And it doesn’t have to be food. My friends Brad Herrmann anf Hai Nguyen took their VERY successful SAAS company and made it a perpetual trust. While ESOPs are great, they are complex and expensive. The state should step in and fill the gap by incentivizing alternative models that keep business local and support thriving, circular economies. THIS would do far more good in terms of economic development than all the boondoggle tax breaks and short-lived strategies currently employed by states. Time for a new strategy. (If you believe, like I do, that we need better answers to selling businesses, check out the work I’ve been doing with Loren Feldman on the 21 Hats podcast. We explore all sorts of models)

The history of a global consumer goods giant began in the late 19th century with the establishment of two pioneering companies in the United Kingdom. One who revolutionized household cleaning with the introduction of Soap and the other was pioneer in the food industry with the affordable alternative to butter that is margarine, and this new company rapidly grew to become a significant player in the European market. In 1929, this merged with the great giant to create a new entity. This strategic merger combined their strengths in soap and margarine production, allowing the new company to diversify its product offerings and expand its market reach. The merger also enabled the new entity to leverage economies of scale, enhance research and development capabilities, and create a more resilient business model. Throughout the 20th century, the newly formed company continued to grow through acquisitions and the development of new products. The company expanded its portfolio to include a wide range of consumer goods, from food and beverages to personal care and home care products. In recent decades, the company has become a leader in corporate sustainability. It launched an ambitious sustainability plan in 2010, setting goals to reduce its environmental impact and increase its positive social impact. This plan focuses on improving health and well-being, reducing the environmental footprint, and enhancing livelihoods. The company has also embraced its productivity by engaging with Faber Infinite to enhance its performance across its operations. This strategic engagement underscores their commitment to continuously improve efficiency in a competitive market landscape. #FaberInfinite #OrganizationalTransformation #businessgrowth #innovation #SuccessStory #FMCG

Mondelēz International continues expansion into cakes & pastries with the acquisition of Evirth - China's category leader for frozen-to-chilled cakes and pastries The move comes after the acquisitions of other players in the same space: Give & Go in North America (2020), and Chipita in the EU (2022). After securing footholds in its key geographies, Mondelez expanded its pastries business in China with the acquisition of Evirth, a company with which it has had a strategic partnership since 2021 What we like: - Attractive space (large: ~$3bn, fast-growing: ~15% CAGR, fragmented, currently mostly unbranded value propositions and consumer tailwinds: premiumization) - Complementary assets with portfolio & GTM synergies - Ownable right to win considering MDLZ assets - Proven fit (already having partnership since '21) - Repeatable M&A model This is a great case of synergistic M&A with a high right to succeed! 𝗔𝗯𝗼𝘂𝘁 𝘂𝘀: FF&A solves the most complex strategic problems of the world's largest FMCG companies across Corporate Strategy, Organic Growth, Digital RTM (eCommerce, DTC, and EB2B), and M&A. 14 out of the world's 20 largest FMCG companies are repeat Clients 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀 & 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #strategy #fmcg #cpg #mergersandacquisitions

And there it is... A few fun facts about Mars planned acquisition of Kellanova: - It would be the largest acquisition by a US food company since Kraft-Heinz in 2015. I wish them better luck. - If you were a Kellanova shareholder since day 1 (October 3, 2023), you would see a 42% increase in the value of your shares at $83.50. Not a bad return for return for 10 months. - Kellanova would have the shortest lifespan of any major food company in recent memory, so far just 10 months old. This beats Kraft Foods Group which existed for 3.5 years between its break from Mondelez and merger with Heinz. Given K's relatively flat share performance over this period (prior to the Mars news,) I don't think it will be missed. - With a combined ~$57B in annual sales, Mars+Kellanova has the potential to challenge Unilever for the #3 spot among global food company. A big move for Mars. Anton Vincent and Gabrielle Dallas Wesley, enjoy the ride! https://lnkd.in/ev-Sg9wz

Tate & Lyle to acquire CP Kelco 👏 The global provider of food and beverage ingredients has announced plans to acquire the nature-based ingredients producer, in a deal worth $1.8bn. The acquisition is set to create a 'powerhouse in the growing global sociality ingredients market', combining both company's expertise to strengthen solution capabilities across its core categories. The move means Tate & Lyle will be well-positioned to satisfy the rising consumer demand for healthier, more sustainable food and drink products. Nick Hampton, CEO of Tate & Lyle, commented: "A combination with CP Kelco is the perfect fit with Tate & Lyle's growth-focused strategy. Together, we will have a compelling customer proposition to meet the growing global demand for plant-based, clean-label and sustainable ingredients and solutions." Didier Viala, President of CP Kelco, added: "CP Kelco and Tate & Lyle are both highly customer-focused businesses with a shared passion for science and innovation. With our complementary portfolio and deep technical expertise, we will bring new value to our customers and new opportunities for our employees." #News #Food #Ingredients #Drink #Acquisition #Growth #Strategy

Well, this was not just a rumor apparently. Congrats to both companies and their advisors for getting this deal done.  Like all deals, time will tell if it was a good one or not. Many have written about the strategy, so there’s not much more to say beyond affirming the wisdom of this combination if you are Mars.  If, like me, you are still wondering about the price, especially for Kellogg’s, here’s some context. The self-reported EBITDA multiple on this deal is 16.4.  That seems a little rich when you look at Mondelez’s acquisition of Cadbury in 2010 (13x), or 3G’s acquisition of Heinz in 2013 (14x) or General Mills acquisition of Pillsbury in 2001 (11x). If you are a Kellogg’s shareholder and you look back at what you paid P&G for Pringles in 2012 (11x) or what you paid for Keebler in 2001 (10x), you are feeling great about this deal.  These businesses are some of the core assets Mars was after and Kellanova management has extracted tremendous value for them relative to the original investment. But if Kellanova shareholders have reason to be happy, I am not sure it is because Mars got fleeced.  Look at what Heinz/3G paid for Kraft in 2015 (20x), or what General Mills paid for Blue Buffalo in 2018 (25x).  Mars itself paid 17x for Wrigley back in 2008, Nestle paid 15x for Purina in 2001, and P&G paid 18x for Gillette in 2005. (BTW, for the M&A geeks who are silently critiquing this, I acknowledge the multiples above are not cost synergy adjusted and that has a material impact on price evaluation, but I have not seen any synergy estimate yet for Mars-Kellanova - and this is just a LinkedIn post, not real work, so discount my analysis as you see fit.) Hindsight tells us some of these deals were good and some not so much.  In the moment, knowledgeable observers could say which ones seemed reasonably priced and which seemed like overpayment.  I don’t claim special knowledge in this case, but Mars-Kellanova seems strategically sound and reasonably priced for the buyer, and a very happy premium for the seller. I think this will turn out well, and I’d love to hear what others think.

Interesting thoughts on the Mars - Kelloggs deal.