Birds Eye Iglo aims to double its sales and become Europe’s dominant frozen food producer with €400m (£340m) of profits and €2bn of turnover by 2013, its chief executive said on Monday after agreeing to acquire Findus Italy from Unilever.
“Making a bigger entity by combining Birds Eye and Findus Italy means we are raising the chances of a successful flotation,” said Martin Glenn, chief executive of Birds Eye, which is known for its fish fingers and frozen peas.
The €805m takeover of Findus Italy, employing 650 people and operating a factory in Cisterna, south of Rome, reunites two businesses that were split when Unilever sold Birds Eye to Permira, the private equity group, in 2006.
The UK-based frozen food group has been frequently listed as a potential candidate for an initial public offering as early as this year, but Mr Glenn said the Findus Italy deal was likely to put off any exit by Permira for about two years.
Mr Glenn said that while Findus Italy, which makes frozen pasta, fish and vegetables, has suffered from stagnant growth recently, he expected it to undergo a similar reinvigoration to Birds Eye after it was bought by Permira.
“The focus and time spent on Findus Italy was insufficient and what we have seen at Birds Eye Iglo is that focus can bring you a lot,” he said.
He expects significant cost savings to arise from improving Findus Italy’s purchasing power by integrating the maker of 4 Salti in Padella, Sofficini and Captain Findus brands into a larger group.
Frozen dishes were increasingly popular in Italy, particularly as more women were working and had less time to prepare fresh pasta. “They eat a lot of fish fingers,” said Mr Glenn, who expects to cross-sell some Birds Eye products in Italy and some Findus Italy products elsewhere in Europe.
Deutsche Bank, Nomura, Mediobanca and Credit Suisse are providing about €500m of debt for the deal.
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