Dairy Crest to Sell St Hubert For €430 Million
Dairy Crest, the UK’s leading dairy foods company, has received a binding offer from Montagu Private Equity to acquire St Hubert, the French branded spreads business, for a cash consideration of Eur430 million (£3441 million).
The transaction follows Dairy Crest’s announcement in March 2012 of a strategic review of St Hubert. During the review a range of options were considered but as a result of substantial interest from a number of potential purchasers it was decided to pursue a divestment.
St Hubert was purchased in January 2007 for Eur370 million (approximately £248 million). Since its acquisition Dairy Crest has increased the revenue and EBIT for St Hubert by 35% and 45%, respectively.
St Hubert has been a successful part of the Dairy Crest group and has consistently increased its market share and profitability. However, Dairy Crest has been unable to make additional synergistic acquisitions in Continental Europe as it envisaged at the time of the acquisition and it believes that greater value may be generated for shareholders through the proposed disposal of St Hubert.
For the year ended 31 March 2012, St Hubert generated EBITDA of Eur48.1 million and EBIT of Eur46.1 million. The gross assets of St Hubert at 31 March 2012 were Eur169 million (£1413 million).
Following the disposal, Dairy Crest will remain a broadly based dairy business entirely focused on the UK with strong brands including CathedralCity, Country Life, Clover and Frijj. It intends to continue to build on the success of its UK branded foods business and restore its Dairies business to a satisfactory level of profitability in the medium term.
“Over the coming months, with a strengthened balance sheet, we will be able to consider a wide range of opportunities including synergistic acquisitions in the UK,” points out Mark Allen, chief executive of Dairy Crest. “This will allow us to employ the same brand-building skills that have contributed to the strong growth of our UK brands and St Hubert’s success. However, we will only do this within strict financial criteria and where an acquisition would add value for shareholders.”
