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One Rock in advanced talks for Innophos: Bloomberg
Posted on Friday, 18 October 2019 09:55
Innophos Holdings, which reportedly started exploring options last month, is said to be in late-stage discussions with One Rock Capital Partners, Bloomberg reported, citing people familiar with the matter.
According to the sources, the private equity group is very close to agreeing a deal for the maker of food additives for the sports drinks and cheese sectors.
However, at this time, no transaction has been finalised, the insiders observed, cautioning there is still a chance that the talks will not lead to a deal.
Shares in Innophos rose 11.3 per cent to USD 37.53 at 15:00 yesterday, before trading was halted at USD 35.38 when the bell rang.
The company had a market capitalisation of USD 696.67 million last night, with stocks up 51.5 per cent since the start of the year, after being significantly boosted in September, when Bloomberg reported the company was working with an advisor on strategic options.
Representatives for One Rock declined to comment when contacted by the news provider.
Innophos creates essential ingredients that improve the taste and texture of products including cheese, baked goods and energy drinks, as well as running a separate division focused on scrubbing agents in toothpaste and additives that make vitamins easier to swallow.
The company believes that by strengthening its core business and increasing its presence in the attractive food, health and nutrition segments, it is on track to generate an adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 20.0 per cent and revenue of USD 1.25 billion by fiscal 2022.
During the six months to 30th June 2019, Innophos recorded net sales of USD 376.45 million, down 8.7 per cent from USD 412.17 million in the corresponding period of 2018.
Adjusted EBITDA declined 4.7 per cent to USD 60.07 million in H1 2019 (H1 2018: USD 63.03 million).
Zephyr, the M&A database published by Bureau van Dijk, shows the food manufacturing industry has been targeted in in 1,415 deals announced worldwide in 2019 to date.
The largest of these involved Henan Shuanghui Investment and Development agreeing to acquire Henan Luohe Shuanghui Industrial Group from Rotary Vortex for CNY 39.09 billion (USD 5.52 billion).
Campbell Soup’s international operations, including Arnott’s Biscuits Holdings of Australia, Kellogg’s cookies, fruit and fruit-flavoured snacks unit, Dairy Crest Group and Bellamy’s Australia, among others, have also been targeted in the year so far.
© Zephus Ltd