UAE – Agthia Group, one of the largest food companies in the United Arab Emirates (UAE), has acquired a 100% stake in Dubai-based confectionery and healthy food brand BMB Group in line with strategy to invest in fast-growing segments of the food and beverage space.
BMB produces and distributes a wide selection of snacks and confectionery including chocolate, Mediterranean sweets and bakery ingredients for its own brand and external partners.
Some of the popular brands under BMB’s portfolio include Asateer, Al Qamar and Freakin’ Healthy. These brands are expected to accelerate the footprint of Agthia’s snacking business while delivering immediate value accretion to Agthia’s shareholders.
During the beginning of this year, BMB generated total revenues of approximately AED 268 million and an estimated EBITDA of AED 54 million (US$72.96m).
These include healthy EBITDA margins that are predicted to increase to around 20% this year, according to a statement from Agthia.
UAE Snack market poised for growth
Expanding into the healthy snacks segment is timely as most middle east consumers are starting to be concerned about their health and are shifting away from products that are considered unhealthy.
According to Euromonitor, the global healthy snacks market is forecast to reach around AED 360 billion (US$98 billion) by 2025.
“This acquisition would enable Agthia to expand its presence and operations in the snacking vertical, further diversifying our extensive product portfolio and geographic reach,” said Alan Smith, Chief Executive Officer of Agthia Group.
“In addition to immediate access to new revenue streams and markets, we are excited by the prospect of exploring opportunities to fuel product innovation, such as the development of new healthy and specialist snacks in response to market trends.”
The transaction – which is subject to customary closing conditions and regulatory approvals for BMB – is expected to be fully funded by cash and instantly accretive to Agthia’s earnings.
If successful, this will be Agthia’s second investment in the snacking and healthy food market following its acquisition of dates company, Al Foah, earlier this year.
Agthia accelerates Middle East expansion
Earlier, Bloomberg reported that the UAE based food processing company is eyeing food deals in Egypt and Saudi Arabia even as it seeks to consolidate its market position in the Middle East.
“We expect to see our growth coming from the consumer business,” Agthia chief executive officer Alan Smith said in an interview with Bloomberg Television.
“We’re going to continue to look for the right opportunities” for acquisitions with a focus on Saudi Arabia and Egypt, he said.
In April, Agthia Group announced that its Board of Directors has approved a strategic acquisition of a majority stake in Ismailia Investments (Atyab), Egyptian producer of frozen processed chicken and beef products.
These acquisitions by Agthia just show how it is committed to the expansion of its healthier food departments and the growth of the brand in the snacking and healthy food industries.
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