Yorkshire ice cream giant goes global in $400m deal

ICE CREAM giant R&R has completed its first acquisition outside Europe, underlining its ambition to become a global player.

Ibrahim Najafi, CEO of R&R Ice Cream
Ibrahim Najafi, CEO of R&R Ice Cream

The Yorkshire business bought Peters Food Group, one of Australia’s oldest consumer businesses, in a deal said to be worth in the region of $400m.

The company has a portfolio of ice creams which are household names in Australia, including Drumstick, Connoisseur, Peters Original and Maxibon.

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Ibrahim Najafi, chief executive of R&R, told The Yorkshire Post: “My vision is about taking R&R over the 1bn euro mark. We are on track to do so.”

He said this would be through organic growth and more acquisitions.

R&R, based in Leeming Bar, bought Peters from Pacific Equity Partners (PEP). The terms of the deal were not disclosed.

PEP acquired Peters from Nestle in 2012 and transformed the business through investment in core brands, new product development and improved operating costs. It has annual sales of around 190m euros.

R&R is Europe’s largest own-label ice cream manufacturer and the second largest overall in Europe.

Its brands include Cadbury Dairy Milk, Oreo, Milka, KitKat, YooMoo frozen yogurt and Kelly’s of Cornwall.

Revenues for the year ending December 2013 hit 681m euros.

Mr Najafi said the latest acquisition showed the stage-by-stage development of the business.

He said: “Stage one was about growing the business in the UK and consolidating the market. Stage two was about entering Europe and learning from what we did in the UK and also from the different cultures in Europe and trying to marry the two together.

“Stage three is about making a global business and going outside Europe. It gives us new opportunities and definitely adds value to the business and what we can do with products. It gives us knowledge we can share.”

He added: “Not bad from humble beginnings at that small company in North Yorkshire.”

Peters is almost entirely branded, compared to 38 per cent of R&R’s products. The acquisition will lift this to 40 per cent.

Peters is 107 years old and based in Melbourne. It employs 500 people.

Mr Najafi said: “We are buying a business that has already got a fantastic team of management. It is up to them. We just agree the three-year strategy and then rest is about delivery.”

Stephen Audsley, chief executive of Peters, said: “With the backing of R&R, Peters will continue to invest in its market-leading brands and in its long history of innovation.

“Manufacturing will continue at our world-class facility in Mulgrave from which we intend to create new opportunities for growth.”

The sale continues a dramatic consolidation in dairy-related businesses globally.

A week ago, China’s Bright Food Group Co Ltd bought 56 percent of Israel’s largest food company Tnuva in a deal that valued it around $2.5bn.

Earlier this month, China’s Wilmar International and a partner agreed to buy Australia and New Zealand bread and dairy company Goodman Fielder Ltd for $1.37bn.

Last year, Canada’s Saputo Inc gained control of Australia’s Warrnambool Cheese and Butter Factory Company Holdings Ltd for more than $500 million after a bidding war.