UNITED KINGDOM / AGILITYPR.NEWS / May 06, 2021 / OWNER of confectionery brand Bebeto, and Turkey’s largest soft candy producer and exporter, Kervan Gıda, has completed its first cross-border acquisition post-IPO. The company signed an agreement to acquire the majority stake in Poland's leading confectionery company ZPC Otmuchów and its subsidiary PWC Odra.

With exports to 85 countries, soft candy producer Kervan Gıda has carried out its first move in line with its global expansion goals, announced at its IPO. The Company, which stated in the past months that it was planning to use 55% of its IPO proceeds on new investment has completed its search.

After carrying out the due diligence Kervan Gida took the necessary actions to acquire Poland's leading confectionery company ZPC Otmuchów and its subsidiary PWC Odra. Through its subsidiary Kervan International AB, a Share Purchase Agreement was signed with Warsaw Equity Management S.A. (WEM) and other related parties, to acquire the majority stake in ZPC Otmuchów and its subsidiary PWC Odra.

Evaluating the acquisition, Kervan Gida’s Group Head of Sales & Marketing Oğuz Ay said, “Our Company had signed a financial advisory agreement with KPMG Yonetim Danismanlik A.S. to evaluate organic growth opportunities in the European Union in line with our long-term growth strategies. The research undertaken to mitigate geographical risk and to strengthen Bebeto’s brand position in the European modern sales channels, is now complete. Our company signed a Share Purchase Agreement to acquire the majority stake in ZPC Otmuchów and ZPC Otmuchów’s subsidiary PWC Odra.”

Financial Chief Officer Adem Demir commented on Kervan Gıda becoming the majority shareholder of ZPC Otmuchów, “Our Company signed a Share Purchase Agreement with Poland-based private equity firm Warsaw Equity Management S.A. (WEM) and other related parties ("minority shareholders"), to acquire the shares between 64.36% and 65.29% in ZPC Otmuchów (WSE:OTM) and 26.95% of shares in ZPC Otmuchów's subsidiary PWC Odra. The purchase price regarding 100% enterprise value of ZPC Otmuchów will be EUR 23.5 million, while the purchase price regarding 26.95% shareholding of PWC Odra will be EUR 3.8 million.”

Stating that the process will be completed towards the end of the second quarter of 2021, Oğuz Ay said, “ZPC Otmuchów and its subsidiary PWC Odra are one of the oldest and well-known soft candy producers in Poland. The consolidated turnover of the companies on December 31, 2020 and 2019, are EUR 50.4m and EUR 49.9m, respectively. Collectively, the acquired companies have over 600 employees and 4 production facilities in Poland, producing branded and private label products such as soft candies, chocolate marshmallows, fruit bars, halva, and savoury snacks. The company has 38% of volume share in soft candy market as a manufacturer in Poland. They have a strong distribution in modern channel and chain stores. We are pleased that this agreement will strengthen our presence in Europe.”

Ay also referred to the plans, “After this move, the focus will be on improving the company’s profitability through increasing soft candy production capacity, optimising operational efficiency through transferring Kervan Gıda’s know-how and technical expertise in this process, and restructuring factories, machines and production lines in line with Kervan Gıda’s regional production objectives and future strategies. Furthermore, positioning all our brands in parallel to our future strategies is another goal. We aim to create significant regional synergies in producing and selling soft candy products through ZPC Otmuchów and its subsidiary PWC Odra’s production capacities, distribution channels and existing customer base.”

Whist explaining that Kervan Gida will continue to operate as an innovative food company that aims to add value to Kervan Gida’s operations, Oğuz Ay added, “We are a brand that is always searching for perfection. Trust, curiosity, and innovation are the basis of our values. Considering these values, we aim to be among the top five companies worldwide in our category by 2023. We hope to further strengthen our operational capabilities with ZPC Otmuchów. Benefitting from European Union customs duty advantages, diversifying our income sources and strengthening our brand awareness globally are among our other goals. Through our domestic investments, we also aim to lead the market with our Bebeto brand.”

The UK office has a pivotal role to play in the expected growth of Kervan Gida. Having achieved year-on-year growth since it was established in 2015, the UK office now distributes the Bebeto and Dexters brands to more than 12,000 retailers across the UK. It has established itself as one of the leading suppliers of confectionery across the country and has ambitious plans to maintain this position. UK Managing Director Stuart Johnston says: “We’re delighted with the recent news of the company’s latest acquisition. Our UK business has grown by 25% alone in the past 12 months; we strongly believe that investment in the European market will be extremely fruitful and that it will go a long way to strengthen our brand value. On behalf of the UK team, we’re delighted to welcome Group Otmuchów into the Kervan Gida family.”