Valeo Foods, the Irish food company that owns brands such as Jacob’s, Batchelors, Kelkin and Odlums, is set to raise €30 million in fresh equity investment in 2025, according to a new report by financial analysis firm Fitch Ratings.
Fitch, a US-based ratings company, has initiated coverage on the company’s bonds, giving it a B rating.
According to Fitch, the company’s rating “reflects its moderate scale among global and regional leading packaged-food producers, although it benefits from its top position in its core markets of Ireland and the UK”, which make up 65 per cent of its revenue.
It said the company has “a strong brand portfolio in a number of ambient food categories, complemented by significant offerings in a private label, suggesting resilient relationships with retailers”.
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That was offset by high starting leverage and “still-recovering profitability after operational underperformance, mainly in the UK” last year.
Fitch based its rating on a number of key assumptions, including no dividend distributions, bolt-on acquisitions worth €20 million a year through to 2027, and a €30 million equity injection in 2025.
A spokesman for Valeo declined to give any details of the mooted equity fundraising.
It is most likely that the funds will come from Bain Capital, the giant US private equity firm that bought Valeo in May 2021 in a €1.7 billion deal. The company received a €50 million cash injection from Bain earlier this year.
Valeo has been on an acquisition spree since the Bain acquisition. In July of this year it bought Appalaches Nature, a Canadian maple syrup business in Québec, which follows on from its purchase in 2022 of Les Industries Bernard & Fils Ltd, another maple syrup producer in Canada.
Earlier this year it bought an Italian bakery company called Dal Colle, having bought another Italian company called IDP Pattini in 2023.
Just this month it bought IDC Holding, a Slovakian maker of wafers, biscuits, sweets and chocolates, which has operations in Central and eastern Europe.
The most recently published accounts for Valeo show the company grew its revenue in 2023 by €142.6 million to €1.39 billion in 2023. In that year its higher costs, along with an exceptional cost of €21.86 million, pushed its operating profit down by 57 per cent to €31.13 million in the 12 months to the end of March this year.
Along with finance expenses of €72.4 million, it ended the year with a pretax loss of €41.28 million, compared with a pretax loss of €2.07 million in the prior year.
The company is aiming to push its revenue to €2 billion annually.
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