Campbell to Acquire Danish Snack Maker - Analyst Blog
June 18 2013 - 4:00PM
Zacks
Campbell Soup
Company (CPB) recently announced its plans to acquire
Denmark-based Kelsen Group A/S from Maj Invest – a private equity
firm and several other investors. The strategic acquisition will
boost Campbell Soup’s growth prospects in the Chinese and Hong Kong
market as well as increase its global footprint.
The U.S.-based manufacturer of
high-quality food and simple meals has not disclosed the financial
details of the transaction. The company however expects the
acquisition to be accretive at the beginning of 2014.
Kelsen Group has a history of
producing quality baked snacks for over 75 years. Over the years,
the company has expanded its distribution network to Asia, South
America, Africa, the Middle East and the U.S. and presently
operates in 85 countries. Given its worldwide presence, we believe
that Kelson Group will be a strategic fit for Campbell Soup’s
long-term growth.
Moreover, the acquisition will
facilitate Campbell Soup to increase its market share in the baked
snacks category, particularly in China where Kelsen Group is the
market leader in the sweet biscuits category. Notably, this
category’s growth rate in China exceeds that of the $60 billion
global sweet biscuits market.
Kelsen Group's presence in the
Chinese market goes back to over 20 years, with its Kjeldsens brand
being popular among retailers and consumers in major cities.
Significantly, over the past 3 years, the brand’s sales have grown
up at a compounded rate of over 28%.
Campbell Soup, which competes with
Flowers Foods, Inc. (FLO) and J&J
Snack Foods Corp. (JJSF), intends to operate Kelsen Group
as a separate business under its Campbell International division.
In 2012, Kelsen Group’s net sales were $180 million, growing at a
compound double-digit rate since 2009.
In the past few months, Campbell
Soup has been aggressively focusing on strategic acquisitions to
expand its international presence as well as brand range. Earlier
this month, following the footsteps of The Hain Celestial
Group, Inc. (HAIN), the company forayed into the premium
organic baby food category by acquiring Plum Organics. We believe
that the acquisition will enhance Campbell Soup’s product
categories and enable it to reach out to a wider range of
customers.
Campbell Soup, which currently
carries a Zacks Rank #2 (Buy) intends to boost its top line and
increase returns on investment through strategic measures. During
fiscal 2012, the company made significant progress in this
direction, including stabilization of the North American soup and
simple meal business, overseas expansion, and growth of healthy
beverages and baked snacks businesses.
We believe that Campbell Soup’s
prudent investment and strategic initiatives toward product
innovation and brand building will lead to an increase in its
customer base and profitability.
CAMPBELL SOUP (CPB): Free Stock Analysis Report
FLOWERS FOODS (FLO): Free Stock Analysis Report
HAIN CELESTIAL (HAIN): Free Stock Analysis Report
J&J SNACK FOODS (JJSF): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Campbell Soup (NYSE:CPB)
Historical Stock Chart
From Sep 2024 to Oct 2024
Campbell Soup (NYSE:CPB)
Historical Stock Chart
From Oct 2023 to Oct 2024