Through its wholly-owned subsidiary NIC Enterprises Limited, Orkla Food Ingredients has signed and completed an agreement to purchase 85% of the shares in the British sales and distribution company Orchard Valley Foods Limited ("Orchard Valley").
Orchard Valley holds strong positions as a supplier of ingredients and accessories to the UK bakery, chocolate and ice cream market. Most of its turnover is generated in the UK, but the company also has increasing exports to Europe. The company was established in 2004 and has achieved good, steady growth in both sales and profitability over several years.
Orkla Food Ingredients holds strong positions as a bakery ingredients supplier in the Nordic region and selected countries in Europe, and has built up a robust position in the ice cream ingredients and accessories segment in the UK.
"Orchard Valley and Orkla Food Ingredients are a good fit. The acquisition of Orchard Valley complements Orkla's current position in the UK ice cream ingredients and accessories segment. It also strengthens our position in categories that are well known to Orkla Food Ingredients. This acquisition offers potential for increased exports and synergies with our present operations," says Pål Eikeland, Orkla EVP and CEO of Orkla Food Ingredients.
Orchard Valley is a privately-owned company and has a total of 72 employees. The company's head office and production facilities are located in Tenbury Wells, UK. In the financial year ending on 31 May 2016, Orchard Valley posted a turnover of GBP 23.9 million (approx. NOK 252 million) and normalised EBITDA of GBP 2.0 million (approx. NOK 21 million).
The agreement also includes an option to purchase the remaining 15% of the shares. The company will be consolidated into Orkla's financial statements from 1 April 2017. The parties have agreed not to disclose the purchase price.
Orkla is a leading supplier of branded consumer goods and concept solutions to the grocery, out-of-home and bakery markets in the Nordics, Baltics and selected markets in Central Europe and India. Orkla is listed on the Oslo Stock Exchange and its head office is in Oslo. In 2016, the Group had a turnover of approximately NOK 38 billion, and around 18,000 employees at year end.
About Orkla Food Ingredients
Orkla Food Ingredients is the leading bakery ingredients player in the Nordic region, in addition to holding growing market positions in selected countries in Europe. Its biggest product categories are margarine and butter blends, yeast, bread and cake improvers and mixes, marzipan and ice cream ingredients. Orkla Food Ingredients has sales and distribution companies in 22 countries, ensuring proximity to bakeries and other industrial customers.
The shareholders of Orchard Valley Foods were advised by Grant Thornton UK LLP and Gordon Lutton Solicitors.
Orkla was advised by Kelsall Steel and CMS Cameron Mckenna LLP.
Oslo, 3 April 2017
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