Darling International buys Vion Ingredients for €1.6bn

Darling International, a US-based food waste recycler, has signed an agreement to take over Vion Ingredients, a division of Dutch food firm Vion Holding, in an all-cash deal of €1.6bn.

Headquartered in Son en Breugel, the Netherlands, Vion Ingredients produces speciality ingredients from animal origin for the pharmaceutical, food, feed, pet food, fertiliser and bio-energy sectors.

The unit manufactures edible fats, blood products and plasma meals, bone products, protein meals, fats, gelatin, and natural casings for sausages under six brands including Rendac, Sonac, Ecoson, Rousselot, CTH, and Best Hides.

Vion operates 58 facilities on five continents with 5,700 employees, and recorded revenues of €1.6bn and EBITDA of €200m in 2012.

Darling International chairman and CEO Randall C Stuewe said, "The combination of Vion Ingredients with Darling International will create the global leader in converting edible and inedible bio-nutrients streams into speciality products and ingredients for the food, feed, fuel, fertilizer and pharmaceutical industries."

Under the deal, Darling will acquire all the shares of Vion Ingredients excluding certain minority interests.

Darling International plans to pay for the transaction through a mix of bank debt, public debt and equity, and expects the purchase to be immediately accretive to its earnings per share.

Stuewe said that the transaction will further diversify Darling International’s revenue and EBITDA profile both geographically and from a product line point of view.

Subject to certain customary regulatory approvals and employee consultations in the Netherlands, the deal is expected to be completed in January 2014.

Vion Ingredients CEO Dirk Kloosterboer said, "Under its new ownership, we will be able to execute our growth ambitions and provide our employees, customers and suppliers with a unique global platform, driving further product innovation and penetration of new markets."

Following the completion of the deal, Kloosterboer will continue to lead Vion Ingredients, as well as be appointed as Darling International COO. He will also join the company’s board of directors.

JP Morgan Securities provided advisory services to Darling International, and also supports the deal with committed financing along with Goldman Sachs and BMO Capital Markets.

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Image: Darling International expects the acquisition to be immediately accretive to its earnings per share. Photo courtesy of PRNewsFoto/Darling International Inc.