Business financial expert, Rosemary Peavler says that businesses that look to acquire another company see this as a low-risk opportunity, especially when they know the market well.
In addition to increasing revenue, it’s an opportunity for a company to not to have to change much and still be able to reap the financial gains in a short amount of time.
It’s also an excellent way for a business to reach global outlets that they may never have thought to conquer. Hearthside and Nomad are two successful companies that are using this growth strategy to their advantage.
Hearthside Food Solution’s Rapid Growth
Business wire reports in a recent announcement that Hearthside Food Solutions has their sights set to quickly grow and expand their company. In a rapidly expanding market, the bar company is acquiring a large European business, VSI, that is focused on diet and nutrition.
Besides the VSI acquisition, Healthside is also expected to purchase a separate production facility in the Boise, Idaho market. As a subsidiary of Post, both transactions are expected to be finalized by September, 2015.
Health and Fitness Trends Drive the Growth
With approximately 19 facilities in the U.S., Hearthside is one of the largest manufacturers of baked goods and bars in North America. With the acquisition of VSI, this adds a few more European facilities that are focused on diet, nutrition and healthy bars.
The sudden increase seems to stem from the rise on meal replacement trends, convenience foods and snacking. Because consumers are also sports driven with a focus on health and fitness, it may see an even greater jump in the market.
While VSI is a leader in the European market, Hearthside is expected to take a major jump forward, especially after acquiring the idle production plant in Boise, Idaho. This would put the powerhouse business at a total of 23 facilities as of September.
Taking on a Whole New Market
Hearthside and VSI are major premier food businesses and recognized global brands. As a leader in Europe, Hearthside will be able to take the capacity and state-of-the-art equipment and use it to their advantage. This timing and location could even make them more of a competitor in the bar and health industry.
The CEO of VSI also agrees with the acquisition and feels that the customers, employees and current leaders will all benefit from the products being offered. In addition to the formulation process and commercialization, Hearthside can develop a new healthy bar and have it catered to both the American and European markets.
Hearthside had its own acquisition in 2014, when it was obtained by a division of Goldman Sachs and Vestar Capital Partnership.
Nomad Foods to Acquire Findus
Another business to enter into a global food acquisition business is Nomad, according to media reports. For approximately $780 million, Nomad would take command of European frozen food and seafood supply business Findus and use their expertise to help the business grow into a world-wide consumer food company. Nomad was founded last year by Noam Gottesman and Martin E. Franklin.
As of June, Nomad also purchased Iglo Foods for approximately $2.6 billion. With approximately 1,500 people based at six of their plants in Sweden, France, Norway and Spain, they expect to generate revenue in the €600 million range.
Reaching a Broader Audience
Through this acquisition, Nomad hopes to move the company forward globally and introduce a variety of new meals that are geared to the frozen food aisles. Although Findus is already a well-known name world-wide, says Nomad Foods CEO Stéfan Descheemaeker, merging it with Nomad provides a “unique value proposition and unlock new growth opportunities.”
