Nomad Foods Aims to Grow Ledo Brand After Purchase, CEO Says
(Bloomberg) -- Nomad Foods Ltd. plans to grow the Ledo frozen-food group brands, not spin them off, after sealing a $724-million Croatian acquisition that gives Europe’s largest frozen food business a foothold in the Balkans.
“It would be a big mistake to make any change,” Chief Executive Officer Stefan Descheemaeker said in an interview via a video-link on Monday. “We are in the business of reinvesting behind these brands, and we want to further grow them. We believe that these brands have the potential to be faster and bigger and better.”
He also added that there are no plans to separate out the ice-cream portfolio in particular, noting that it complements the brand’s other frozen savory offerings.
Nomad bought the group from Croatian conglomerate Fortenova Grupa d.d. The biggest transaction in the Balkans this year includes Zagreb-based ice-cream and frozen-food maker Ledo, as well as Frikom in Serbia and Ledo Citluk in Bosnia-Herzegovina.
There is no plan to sell shares to finance the offering, Descheemaeker said. Nomad will use cash and borrow money to finalize the deal. The company’s debt-to-Ebitda ratio post-merger will rise to 3.8, but is expected to decline to less than 3 by 2022.
The pandemic hasn’t derailed Nomad Foods from a course of uninterrupted growth in the last four years, the CEO said.
“Our M&A target is first and foremost Europe, and we still have a lot of potential in central and eastern Europe,” he said without elaborating.
The takeover is expected to be concluded in the third quarter, pending regulatory approvals. Nomad Foods has also secured “good arrangements” with Fortenova’s retail arms, allowing it to remain their category leader, according to Descheemaeker. Konzum and Slovenia-based Mercator, both Fortenova companies, together comprise the largest retail operation in the Balkans.
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