Having just opened its €100m global technology and innovation centre in Naas earlier this month, Kerry Group has now acquired three businesses in the US for a combined consideration of $735m (about €650m).

This set of deals brings year-to-date spending close to €1bn (€900m) – nine deals have completed so far in 2015. The majority of these deals are in taste technologies while two are in nutrition-specific areas. It is also understood that one or two other smaller deals (up to €100m) may be completed by year end.

The three businesses, Red Arrow Products, Island Oasis and Wellmune, had annual revenues of $301m (€264m) last year and earnings of US$59m (€52m), giving an EBITDA margin of 19.6%. This is significantly better than the 11.5% margin generated by Kerry group last year. The price paid is about 12.5 times earnings for the three businesses.

While this is more than it has paid for other similar businesses recently, it is in line with the multiples being paid for other businesses in the ingredient sector. Kerry is to finance the acquisitions from existing lines of credit.

Red Arrow manufactures natural smoke and grill flavours for meat and is headquartered in Wisconsin. Island Oasis is a natural cocktail mixes business serving the restaurant and hospitality segments of the US market.

Wellmune produces and markets natural food, beverage and supplement ingredients that strengthen the immune system.

Taste and nutrition

Kerry has been moving more into taste and nutrition in the past 12 months. It is also playing on the natural trend, which is currently very in vogue.

The group is also focusing more on food service, as it sees this as a growing trend where it is stealing share from retail in many markets.