UAE – Savola Group, a Saudi Arabia- based consumer goods company, has agreed to acquire Bayara, a manufacturer of nuts, dried fruits and spices as part of a strategy to invest in high growth sectors.
Bayara specialises in the manufacture and distribution of healthy snacks including raw and roasted nuts, dates, seeds, dried fruits and confectionery. It also produces cooking ingredients such as herbs, spices, and pulses.
The privately held company says it processes around 23,000 tonnes of goods each year and operates out of the UAE and Saudi Arabia.
Savola said in a filing that the acquisition of Bayara is “a continued activation of Savola Foods Company’s announced strategy to enter attractive, value-added categories with increasing appeal within the food sector.”
Savola said it will finance the US$260 million transaction through a combination of operating cash flows and available bank loans.
Earlier Savola Group reported a net profit of 153.8m Saudi Riyals (US$42.34 million), after zakat and tax, an 11% drop compared with the same period in the previous year.
The company attributed the drop in profits to lower sales and margins in the retail sector, a lower share of profits from associates, higher operating expenses, and higher zakat and income-tax expense.
The group’s first-quarter revenue stood at 5.95bn Saudi riyals (US$1.59 billion), up 0.5 percent from 5.92bn riyals (US$1.58 billion) in the same quarter a year ago.
Savola’s acquisition of Bayara is a classic example of what is currently happening in MENA’s Food and beverage sector.
Companies in the region are increasingly evaluating acquisitions and product diversification to boost their standing in a market that has previously relied heavily on food imports.
Almarai in May said it plans to invest 6.6 billion Saudi riyals (US$1.76bn) over the next five years to expand its poultry business across the kingdom.
In May, the company acquired an additional stake in Riyadh-based snack maker Modern Food Industries amid a product diversification push.
Abu Dhabi’s Agthia Group, one of the Mena region’s top food and beverage companies, also recently completed its acquisition of Jordan’s Nabil Foods, a processed meat business, and also merged with data-processing company Al Foah.
The company has also agreed to buy 75 percent of Egypt’s Ismailia Investments, which makes frozen meat products at a cost of US$205 million.
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