Hilton Food Group is raising £75 million through an equity placing to help it to fund the acquisition of a Dutch smoked salmon producer.
The group announced the €90 million purchase of the Dutch Seafood Company, which trades as Foppen, this morning to expand its presence in a growing protein category as well as entering the US market.
The deal follows hard on the heels of the recent acquisitions of Fairfax Meadow, a leading meat supplier, and the remaining 50 per cent of Dalco, a vegan and vegetarian food manufacturer, giving it full ownership.
Hilton said that Foppen would significantly expand its seafood business, with the potential to extract procurement and other cost savings as well as providing cross-selling opportunities to both companies’ customer bases. Foppen would bring with it two well-invested smoked salmon facilities in Harderwijk, in the Netherlands, and Preveza, in Greece, together with an experienced management team and 500-strong workforce.
The business, founded in 1918 by the Foppen family, focuses on added-value speciality smoked salmon poducts such as smoked toast salmon. In the year to the end of March it delivered revenue of €139.7 million and underlying earnings of €10 million on an adjusted basis. Hilton said the deal would boost earnings in the first 12 months.
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The British group said that although the majority of the £75 million equity placing would be deployed to fund the deal, some of it would refinance the £23.8 million Fairfax Meadow deal.
Hilton Food was founded in 1994 as a packager of beef and lamb for Tesco, prepared at its factory in Huntingdon, Cambridgeshire . Since then it has expanded to 19 food processing facilities across 16 markets in Europe and Australasia. It was listed in 2007.
The boom in meal consumption at home during the pandemic has catapulted supermarket meat suppliers up the league table of the UK’s biggest food companies, Hilton jumping six places in the OC&C Top 150 rankings to become the UK’s second largest food and drink supplier, behind Associated British Foods.
Philip Heffer, 55, the Hilton chief executive, said: “The acquisition of Foppen is an exceptional opportunity for Hilton and another step towards our goal of becoming the global protein partner of choice.”
He added: “More and more consumers around the world are seeking affordable, high quality and sustainable protein, and this acquisition will help Hilton take our offer into new markets and to new global customers for the first time.”
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Shares in Hilton Food ticked up by 3.5p, or 0.3 per cent, to £12 in late morning trading. The placing, which is being run by Numis via an accelerated bookbuilding process, will represent about 8 per cent of the group’s existing share capital.