Nomad Foods cooks up deal to buy Goodfellas Pizza
18 Jan 2018 --- Goodfella’s Pizza has been offloaded to the owner of Birds Eye, Nomad Foods, in a €225 million deal (US$274 million). Nomad Foods Limited has entered into an agreement to acquire Green Isle Foods Ltd from a subsidiary of Boparan Holdings Ltd for the estimated sum on a debt free, cash free basis.
Goodfella’s Pizza manufactures and distributes a portfolio of leading branded and private label frozen pizzas in the UK and Ireland.
The Goodfella’s brand, which accounts for the majority of Goodfella’s Pizza revenues, was founded in 1993 and holds number one and number two market share positions within the frozen pizza category in Ireland and Britain, respectively.
The acquisition also includes the San Marco brand and two frozen pizza manufacturing facilities, which provide a foundation for future expansion in the category.
Commenting on the transaction, Stefan Descheemaeker, Nomad Foods’ Chief Executive Officer says the acquisition of Goodfella’s Pizza comes at an exciting time for the company.
“2017 was a banner year as investments in our core portfolio translated into strong organic revenue growth. We exited the year on a high note, with our updated guidance reflecting better than expected top and bottom line performance during the fourth quarter,” he said.
“Goodfella’s Pizza creates a new and exciting growth avenue into frozen pizza, a strategic category that is both sizable and complementary. We have a strong foundation in place and are well positioned to create shareholder value as we apply our proven toolkit of capabilities to Goodfella’s Pizza and further develop our portfolio of iconic and market leading brands.”
“We are excited to welcome the Goodfella’s Pizza employees to the Nomad family.”
Noam Gottesman, Nomad Foods’ Co-Chairman and Founder, commented: “We are pleased to announce the acquisition of Goodfella’s Pizza. Over the past two years, Stefan and the team have successfully integrated two of Europe’s largest frozen food businesses while strengthening the core product offering.”
“With strong organic revenue growth momentum, the time is right to expand into new strategic categories such as pizza, which offer adjacent avenues for further growth and synergies. The Goodfella’s Pizza brands and team broaden our product offering and customer reach and solidify our market leadership within the United Kingdom and Ireland. We are pleased to welcome Goodfella’s Pizza to the Nomad Foods portfolio.”
Boparan Holdings Limited, is also the parent company for 2 Sisters Food Group. Ranjit Singh, Chief Executive of 2 Sisters Food Group, said: “We are pleased to announce this transaction of our Frozen Pizza businesses. We have had approaches over the past couple of years for these businesses, and we have been talking to several interested parties during this period. But a sale had to be at the right time, with the right buyer, and it had to be a deal that fitted with our long-term strategy.”
“This deal represents our first major step to transform 2 Sisters and build a better business. Nomad Foods is a fabulous new home and this deal will enable the business to continue to flourish with a new owner who are experts in the Frozen category.”
“The net proceeds from the sale are intended to be used to repay debt and to invest in the Group’s core businesses.The Green Isle and Donegal Catch brands, and our frozen pastry business remain within our business.”
“With customers and consumers at the heart of everything we do, we will continue to deliver great quality products every day.”
Nomad Foods expects the acquisition to be immediately accretive to adjusted EBITDA and adjusted earnings per share and, within two years post-closing, contribute approximately €150 million (US$183 million) revenue, €22 to €25 million (US$26.8 million to US$30 million) adjusted EBITDA and €0.08 (US$0.10) to €0.09 (US$0.11) adjusted earnings per share.
The purchase price is expected to be funded through cash on hand and the transaction is expected to be completed in the first quarter of 2018, subject to certain closing conditions.
Company expects 2017 results to exceed prior guidance
In addition, Nomad Foods now expects 2017 adjusted EBITDA to be approximately €328 million (US$400 million) versus the prior expectation of approximately €325 (US$396 million) to €327 million (US$399 million) and organic revenue growth of approximately 5 percent for the fourth quarter of 2017 versus prior guidance of approximately 3 percent.
Nomad Foods will report three months ended December 31, 2017, and audited the full year 2017 financial results in March.
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