Stratas Foods LLC acquires AAK Foodservice’s Hillside facility

USA – Stratas Foods LLC, a prominent supplier of fats, oils, mayonnaise, dressings, and sauces for the foodservice sector, is acquiring AAK Foodservice’s Hillside facility in New Jersey. 

This acquisition aims to strengthen Stratas’ position in the value-added oils, dressings, sauces, and mayonnaise markets. 

Following this deal, Stratas will expand its manufacturing footprint in the U.S. from eight to nine facilities.

Erik Heggen, CEO of Stratas Foods, emphasized the importance of this acquisition, stating, “The addition of AAK Foodservice, Hillside is part of our strategy to enhance our presence and capabilities in the Northeast.” 

He added that this facility, along with their Englewood, NJ location, will provide a strong foundation for future growth alongside their customer base.

The Malmö-based AAK anticipates that the transaction will lead to a one-time positive cash flow impact of approximately SEK600 million (US$56.55 million) upon closing. 

AAK plans to use the proceeds to enhance its European foodservice operations, including the construction of a new facility to replace its existing plant in Dalby, Sweden.

The deal is subject to standard closing conditions. 

Employees from the Hillside facility will transition to Stratas Foods, which serves the foodservice, food ingredients, and retail private label markets across North America.

Johan Westman, President and CEO of AAK, explained that this move aligns with their strategy to streamline the Foodservice segment, focusing on Europe where they see greater growth opportunities. 

In addition to divesting the Hillside plant, AAK is investing in modernizing its Hastings Foodservice site in the UK to enhance operational efficiency.

Stratas Foods, a joint venture between Archer Daniels Midland (ADM) and ACH Food Companies, was established in October 2008 and generates around US$700 million in annual revenue. 

AAK’s 2023 annual report indicated strong growth in operating profit per kilo, despite a decline in overall volumes, surpassing their target of approximately ten percent average operating profit growth.

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