AAK acquires US shortening maker, surprising market watchers
The supplier, headquartered in Sweden, said that the acquisition of Golden Foods/Golden Brands, which also produces speciality oils and fats, will add a new geographic dimension to its business in the US, in that it gives it two production sites there – the existing one on the East Coast and now one in the Midwest.
“The product lines expand and complement our existing product portfolio and speciality strategy,” added Jean-Marc Rotsaert, president AAK USA.
AAK said that flaked shortenings have the ability to add colour, flavour and aroma to bakery products, as well as ensuring a better mix of ingredients with fat. They are typically used in biscuits, bread and pizza.
Speaking to BakeryandSnacks.com this morning, Marcus Bellander, an analyst based at Carnegie Investment Bank in Stockholm, who said he yet had to weigh up the financial implications of the move, described it as somewhat unexpected. “I would have assumed that Asia, which is experiencing rapid growth, was the more logical choice regarding a new acquisition for AAK.”
Peter Wallin, an analyst at Swedish equity group Handelsbanken, expressed similar sentiments, but told this publication that an additional US facility made sense from a logistics perspective for the fats and oils giant and its customer base in what is an “extremely successful market for AAK.”
“Expansion at AAK’s existing US production site to increase capacity is already underway so this acquisition will complement the work being done in New Jersey,” he added. Moreover, said Wallin, the takeover of the fats, oil and shortening specialist completes the supplier’s food ingredients portfolio.
Founded in 1982 and located in Kentucky, Golden Foods/Golden Brands employs 160 people and had revenue of around $120m in 2010.
The financial details of the transaction were not disclosed but AAK said the acquisition, effective from today, is expected to have only limited impact on its 2011 operating profit, with material benefits beginning from the first quarter in 2012.
As well as in the US, the Malmö based fats and oils supplier has production facilities located in Denmark, Mexico, the Netherlands, United Kingdom, Sweden, and Uruguay.