Norwegian consumer goods group Orkla has purchased 84% of the shares in US ice-cream group Denali Ingredients.
Nils K. Selte, president and CEO of Orkla, said, “The acquisition of Denali Ingredients is a significant and natural step for OFI [Orkla Food Ingredients] into the market for ingredient solutions for the US ice-cream industry.
“The food ingredients sector is fragmented with significant potential for further consolidation and growth. Based on these opportunities, we will now initiate a process to seek a long-term partner for OFI to accelerate growth and value creation.”
Denali Ingredients
Denali Ingredients develops and manufactures ingredient solutions for the US ice-cream industry and complements Orkla’s position in the European market for ice-cream and confectionery ingredients.
The new business will be part of the Norwegian group’s Sweet Ingredients vertical.
The Wisconsin-based group has seen strong organic growth of more than 10% per annum over the past 15 years.
The company operates two manufacturing facilities in the US and employs 160 people.
“We are very pleased to become part of OFI, which is already a major player in Denali’s categories in Europe, and with a deep understanding of our industry. I am convinced that together we will continue Denali’s journey of growth and value creation. As a team, we look forward to a fruitful partnership and cooperation,” added Neal Glaeser, CEO of Denali Ingredients.
Denali Ingredients
Denali Ingredients is expected to generate a total turnover of USD 99 million in its 2022 financial year (ending 30 September), equivalent to NOK 1.1 billion, and a run-rate normalised EBITDA of USD 14.4 million, equivalent to NOK 156 million.
Denali Ingredients includes the entities Denali Ingredients LLC, Denali Staffing LLC, Denali Investment Properties LLC, and Denali Equipment LLC.
As part of the transaction, the seller and Denali Ingredients’ CEO, Neal Glaeser, will invest in Denali Ingredients with a combined stake of 16%, and Glaeser will continue in his role.
The transaction values Denali Ingredients at USD 200 million, on a 100% cash and debt-free basis, equivalent to NOK 2.2 billion.
In addition to the initial purchase price, the agreement includes a potential top-up payment, dependent on the company’s performance over the coming years.
The transaction is subject to regulatory approval and is expected to be completed in the fourth quarter of 2022, with consolidation into Orkla’s financial statements from the date of completion, the company added.
© 2022 European Supermarket Magazine – your source for the latest A-brand news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.
