Ebro’s premium pasta power play
The company has taken a 70% stake in Bertagni 1882. Bertagni’s current shareholders and managers, Antonio Marchetti and Enrico Bolla, will retain the remaining 30% of share capital. This will “ensure the continuity of the outstanding success story of this company”, Ebro said.
Bertagni operates production facilities in Vicenza and Avio, in Italy, and employs 275 people. In 2017, gross sales exceeded €70m, 90% of which were generated in Italy. The transaction has an enterprise value of €130m, before relevant debt adjustment.
Ebro, the world’s leading rice processor, aims to become a “worldwide reference” in premium food.
The Spain-based manufacturer has a footprint in more than 25 countries in Europe, North America, Asia and Africa. Within developed markets in Europe and North America, Ebro has been working to grow its business in premium segments through investment in product development, including a significant spend to boost its microwave production, and via acquisitions.
Recent years have seen Ebro complete a number of deals, including the acquisition of organic baby food firm BIA, the purchase of a majority stake in Italian functional food group Geovita, and Spanish organics group Vegetalia.
The company stressed that Bertagni is an excellent fit for this strategy, adding a premium and authentic brand to the business. Ebro noted Bertagni is the “oldest brand of filled pasta in Italy” and "a specialist of the fresh pasta premium segment”, with “outstanding know-how and products”.
Ebro, already the world’s second-largest pasta maker, noted that the acquisition will bolster its market share in the higher-growth fresh pasta segment.
“Ebro considers this acquisition as a great opportunity to accelerate its growth in the promising fresh segment and become the second largest producer of fresh pasta in the world, within Ebro’s strategy of consolidating its growing in all segments of fresh food,” the company noted.
Given the slow growth consumption environment in Europe’s pasta market, increasing exposure to more buoyant fresh pasta makes a lot of sense. This logic is supported by Ebro’s most recent sales figures, released in October and covering the first nine months of the year.
Ebro revealed that total pasta sales in the period were down 1.3% to €895.9m. In addition to a “significant” decline of the wellness segment in North America, Ebro called out a hot summer in Europe and a “waning market” in France.
However, the company noted, the performance of its premium pasta subsidiary, Garofalo, was buoyant thanks to international expansion and NPD focusing on fresh pasta segments.
“Garofalo continues to register double-digit growth, with returns growing significantly and the brand firmly establishing its premium position. We started to market our fresh pasta in Italy and France in August,” the group noted.
The transaction remains subject to antitrust approval. It is expected to close within the first quarter of 2018.