Lactalis acquires siggi’s Icelandic yogurt company
The company was founded by Siggi Hilmarsson who, after moving to the US from Iceland, began making yogurt in his kitchen, which he said was in response to finding American yogurt too sweet and full of extra ingredients.
His recipe is based on skyr, the Icelandic yogurt Hilmarsson grew up eating in his native Iceland.
After initially selling yogurt at an outdoor market in Manhattan in 2006, siggi’s is now a top five selling yogurt brand in many mainstream grocery chains including Stop & Shop, Meijer and Publix and recently became the top selling yogurt brand overall in Whole Foods, according to Nielsen (4 and 12 weeks ending 12.2.17).
Growth opportunity
siggi's will continue operating out of its New York City office and will remain a standalone company under its current senior leadership team, which includes its founder as CEO, and Bart Adlam as president.
Hilmarsson said the deal offers the opportunity for further growth.
"Our core values of clean ingredient label and less sugar will remain 100% unchanged. Consumers everywhere are actively trying to reduce sugar in their diets so our offering has a global relevance," Hilmarsson said.
Adlam said siggi's topline grew 50% in 2017, and added the company expects to match this in 2018 as further innovations are launched.
Emmanuel Besnier, president of the Lactalis Group, said the deal further expands Lactalis’ yogurt platform in the US.
“We look forward to supporting siggi's as it continues to bring its retail partners exceptional dollar growth in the yogurt category," Besnier said.
The acquisition is subject to expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act in the US.
The transaction price was not disclosed.
Emmi cashes in
Meanwhile, Swiss dairy company Emmi announced that it had divested its shares of siggi’s.
Emmi had owned a 22% stake in siggi's following two transactions in 2012 and 2013, when Emmi was also a contract manufacturer for the brand.
Emmi said it will profit significantly from this transaction in the financial year 2018.
Swiss consumer goods analyst company MainFirst Schweiz AG reported that it estimates the extraordinary profit to be CHF 50m ($51.2m), based on assumptions of siggi's CHF 125m ($128m) revenues, a 14% EBITDA and a 12% EBIT margin.
It added transaction multiples could be 1.8x sales, 13x EBITDA, and 14.6x EBIT.
Product recall update
Lactalis has recently been hit by a Salmonella recall, and also announced yesterday that it confirmed the cessation of production of milk and infant products at its Craon plant from December 8, 2017.
In December, it was reported that Lactalis believed it had traced the source of Salmonella contamination in infant formula to one of its drying towers at Craon.
The firm said information from authorities and results of its investigations allowed it to identify a probable cause of contamination on one of the drying towers in Craon from May 1-6, 2017.
At least 20 infants became ill in eight different regions of France, through Salmonella linked to infant formula milk produced by Lactalis.
