Kerry to sell sweet ingredients portfolio for €500m to IRCA

Irish ingredient supplier Kerry will sell its sweet ingredients business to Italian food ingredients maker IRCA for €500 million as it looks to focus on areas where it can create the most value, its CEO said.

IRCA, a B2B portfolio company of US equity firm Advent International, manufactures chocolate, creams, pastries, and gelato. For over 100 years, IRCA has been supplying businesses across the world, distributing its products globally using 13 production facilities based in Europe, the US, and Asia.

“There are so many exciting long-term opportunities for this combination, and we look forward to supporting the management team in this next phase of growth for the business,” said Francesco Casiraghi, managing director at Advent International.

A sweet deal

Kerry’s sweets and cereals arm is a leading supplier producing finished products such as sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées in Europe and the US. It has ten manufacturing sites, six in Europe and four in the US, with a broad range of technological capabilities. The division is expected to create €1 billion in revenue with its latest acquisition of IRCA, creating a global leader in semi-finished food ingredients.

“We are pleased to have entered exclusive negotiations with IRCA, who have a strong track record of developing their business within the category,” said Edmond Scanlon, CEO of Kerry.

“This transaction would represent another strategic development in Kerry's evolution, as we continue to look to enhance and refine our Taste & Nutrition portfolio, aligned to the areas where we can create the most value.”

Strategic development

Kerry is a leading food ingredients company that has been expanding and diversifying. In 2021, it acquired clean-label preservatives manufacturer Niacet and aims to double its reach by 2030.

It has also invested significantly in biotech in 2022, acquiring German precision fermentation company c-LEcta and Mexican enzymes manufacturer Enmex. These acquisitions would accelerate innovation capabilities in enzyme engineering, fermentation, and bio-process development, the company said at the time. The Irish ingredients company will use proceeds of the sale with IRCA to continue strategic development of its Taste & Nutrition business.

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"We are delighted to partner with Kerry on this transaction and look forward to its successful conclusion," said Massimo Garavaglia, CEO of IRCA.

“This acquisition would represent a strong fit with our portfolio, with its highly complementary product and technological capabilities, and help us to become a truly global player.”

The sale is expected to close in the first half of 2023, following employee consultation, and information processes, subject to regulatory approval and routine closing adjustments.