FDBusiness.com

Swedish confectionery group Cloetta has agreed to acquire Locawo (Lonka), a Dutch company producing and selling fudge, nougat and chocolate, for SEK295 million (Eur31.5 million) in cash. The acquisition will significantly strengthen Cloetta’s position in the Netherlands.

Founded in 1862, Cloetta is a leading confectionery company in the Nordic region, The Netherlands, and Italy. Cloetta manufactures and markets sugar confectionery, chocolate products, pastilles and chewing gum, and its products are sold in more than 50 markets worldwide.

Lonka’s sales amounted to about SEK300 million in 2014 with the Netherlands being the core market, accounting for about half of the sales. The Nordic countries and the UK are other important markets, especially within Pick & Mix.

David Nuutinen, CEO of Cloetta.

“Lonka is a well-known brand that will significantly strengthen Cloetta’s positon in the Netherlands. The acquisition will diversify Cloetta’s product range into new technologies and categories including the Dutch chocolate market. It will also create cost synergies, thereby over time supporting Cloetta’s EBIT-margin target of 14 per cent. In addition, there are long term revenue synergies that can be realized,” says David Nuutinen, CEO of Cloetta.

Lonka primarily produces and sells fudge, nougat and chocolate products. Approximately 50 per cent of sales are branded and 50 per cent are Pick & Mix sales and contract manufacturing. Lonka was established in the Netherlands in 1920. The products are produced in two factories in the Netherlands, one in Roosendaal and one in Dieren. Lonka has 130 employees.

Cloetta’s total sales in 2014 amounted to SEK5.3 billion, where Sweden was the largest single market and accounted for approximately 32 per cent of total sales. The other Nordic countries accounted for around 28 per cent, Italy for around 14 per cent, the Netherlands for around 12 per cent and the other markets for around 14 per cent of total sales.