Fruit and vegetable distributor Total Produce has agreed to buy controlling stakes in two Dutch companies for as much as €23 million ($36 million).
Total Produce will initially pay €9.5 million for the 60 per cent holdings in Haluco BV and Nedalpac BV. Up to €13.5 million may become payable, depending the achievement of profit targets by 2010.
The two companies are headquartered in Bleiswijk and supply salad products across Europe
In a statement, Total Produce said the companies operate from extensive purpose-built facilities and employ almost 400 people.
For the year ending December 31st, 2007, the two Dutch companies recorded a combined profit before tax of €5.5 million on turnover of €298 million.
Total Produce said the net assets of the two firms would be approximately €7.5 million at completion, with net debts of €10 million.
The two companies' management teams will be retained, the statement added.
Analysts said the deal appeared to be value enhancing and should be earnings enhancing from the date of acquisition. They also suggested that opportunities to consolidate the two companies may exist.
Carl McCann, Total Produce chairman said: "The management team operate a large and successful business and we are very pleased that we have reached agreement with them and to join with them as shareholders in the companies."
Last year, in the first full trading year for Total Produce following its demerger from Fyffes, the company reported a 30 per cent rise in sales and a 7.9 per cent increase in pretax profits to €38.9 million. Sales over the year rose to €2.4 billion in 2007.
Mr McCann said the target was to double turnover over a five-year period.
