The completion of the €2.6bn (£1.84bn) acquisition of Birds Eye owner Iglo marks the start of Nomad Holdings’ growth story, one of its founders has said today.
Iglo Group was reeled in by Nomad as the ambitious, newly formed group’s anchor investment back in April.
Former ABInBev and Delhaize executive Stéfan Descheemaeker has taken the reigns at Nomad, now renamed Nomad Foods, as CEO following the close of the transaction. Iglo chief financial officer Paul Kenyon has also been appointed as CFO of Nomad and joins the board of directors.
“I am excited to embark on this journey,” he said. “There are abundant organic and acquisitive growth opportunities available within the consumer foods space and I look forward to working with both the Nomad and Iglo Group teams in order to realize new levels of success.”
Nomad co-founder and co-chairman Noam Gottesman added the completion of the acquisition marked the start of the investment group’s growth story.
“Through Iglo Group, Nomad has gained an established presence in Europe’s fragmented frozen foods space. Martin [E. Franklin – fellow co-founder] and I look forward to building on Iglo’s market-leading position and to expanding into new and adjacent categories through disciplined M&A activity.
“Our talented team led by Stéfan, strong financial footing, and supportive shareholder base provide us with the resources necessary to pursue growth opportunities that will pave the way for long-term value creation.”
Iglo Group recently reported a 2.3% slide in like-for-like sales in the first three months of 2015, with total revenues falling 4.2% on a constant currency basis after trading was impacted by one less trading day year-on-year and its exit from Romania, Slovakia and Turkey. And the latest accounts for Birds Eye in the UK revealed pre-tax profits plunged more than £20m (26%) to £62.7m on sales down 4.6% to £446.3m in 2014.
The Iglo transaction was funded through a combination of cash, equity and proceeds from a private placement to a limited group of institutional investors of about $795m (£493m).
Exiting owner Permira and senior management also reinvested €133.5m of the proceeds into Nomad to take a 9% stake in Nomad.
Since the takeover, Iglo has repaid €490m of existing term loans to reduce its net debt to less than 3.8 times its EBITDA, which in the 2014 financial year was €306m. Iglo also repriced its term loans and reduced overall interest rates which led rating agencies Moody’s to upgrade its status from B2 to B1 and Standard & Poor’s revising its outlook from ‘stable’ to ‘positive’ and reaffirming its B+ rating.
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