Swiss-Irish food group, Aryzta has negotiated a deal with the private equity firm Lion Capital to acquire the French food business, Picard for €446.6 million ($480 million). The deal will largely be funded by the €404 million in net proceeds that Aryzta received a week before from the sale of 49 million shares in food and agribusiness group, Origin Enterprises.
Under the terms of the deal, Aryzta will acquire a 49% stake in Picard, which has a leading market share in specialty foods in France. The company’s full-year revenues for fiscal year 2015 totaled €1.37 billion ($1.47 billion), and its March 2015 earnings before tax, depreciation, and amortization (ebitda) was €192 million ($206.25 million). Aryzta will also gain two seats on the Picard board.
The purchase of Picard, which has an enterprise value of €2.25 billion ($2.42 billion), following the sale of Origin Enterprises, is a smart strategic move by Aryzta as it allows the group to advance up the supply chain. Aryzta states that it will treat Picard as an associate entity and will expect the company to make a net contribution of at least 3% to underlying earnings per share on an annualized basis. This would in effect, offset half of the negative 6% impact of the Origin placement.
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