Scoop for R&R as it pays £49m for ice cream maker Fredericks

James Lambert, CEO and executive chairman of North Yorkshire-based R&R, said that this would mark its 12th acquisition in the UK and its 18th overall. The deal, which would see R&R acquire all of the issued share capital of Fredericks Dairies, is conditional upon clearance from the Office of Fair Trading.

Ice cream maker Fredericks Dairies, which has a factory at Skelmersdale in Lancashire, has the licence to manufacture ice cream and iced refreshment brands such as Cadbury, Del Monte, Vimto, Britvic and Barratt’s. It achieved sales of £45m in the year to August 31, 2012, and was the sole supplier of ice cream to the 2012 Olympic and Paralympic Games.

The vendors, Frank and Philip Frederick, are keeping their Freezeserve cold storage and distribution business at Simonswood.

It is expected that R&R will record a turnover of around 600m euros in the year to the end of December 2012, with core earnings of around 84m euros, but the audited accounts have not yet been published.

R&R’s turnover for the previous year broke through the 500m euro barrier for the first time, while core earnings were 66.2m euros.

On the acquisition of Fredericks Dairies, Mr Lambert said: “I am very excited about acquiring this successful business whose popular licensed products will prove valuable additions to our branded portfolio.

“It will also enable R&R to extend its successful partnership with Mondelez International (formerly Kraft) into the UK.

“Fredericks is already launching a cone and 500ml super premium tub under the Oreo brand and this acquisition will allow us to accelerate this successful innovation programme alongside our popular Nestlé, Cadbury, Kelly’s and yoo moo brands.”

R&R signed a deal with US firm Kraft, now Mondelez International, in 2011 to develop its brands across 10 European countries.

Alongside the arrangement with Mondelez International, R&R also holds licensing agreements with Nestlé, Disney and GlaxoSmithKline and a distribution deal with Mars.

The company also owns yoo moo, the UK frozen yoghurt brand. Last year, R&R bought Italy’s leading own-label ice cream manufacturer, Eskigel, for around 77m euros.

Meanwhile, US investment fund Oaktree Capital is planning to sell its 82 per cent stake in R&R Ice Cream. But the management, led by Mr Lambert, has not ruled out a return to the stock exchange. Oaktree holds an 82 per cent stake in R&R after taking it private in 2005. The management owns the rest.

Mr Lambert said: “I would say in the next month there will be a decision made. If it’s not sold privately I would expect that if the stock market is in good heart, which it is, that we would float the business towards the end of the year.” He said there has been “a lot of interest” in the business.

R&R employs 4,000 people across Europe, including 900 in Yorkshire. If the acquisition goes ahead, it will take on all 200 full-time employees of Fredericks Dairies. R&R has invested nearly £20m in its Northallerton headquarters over the last two and a half years, said Mr Lambert, in areas including machinery and warehousing.

He also said that R&R will be acquiring more businesses but not until autumn at the earliest.

Mr Lambert said the company will continue to target new markets. “We are in Poland, Germany and Italy, France, where we have got manufacturing plants, and we are looking at Spain, central Europe and Turkey.”

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