GraceKennedy buys food chain in the US
GraceKennedy Limited has entered into an agreement to purchase the operating assets and business of La Fe Foods Inc for US$26 million.
The transaction is being executed through GK’s wholly owned and new subsidiary GraceKennedy Foods (USA) LLC, the conglomerate said Friday.
The deal includes the La Fe brand, which GK describes as “the top Hispanic brand in the frozen food category in northeast USA”.
In a release, GK said La Fe Foods, which was established in 1968, currently has revenues of approximately US$80 million and would be the “platform for the growth of GraceKennedy’s North American business going forward”.
The chain would add approximately $9 billion or 13 per cent more to GK’s $67 billion revenue base.
La Fe Foods has operations in Moonachie, New Jersey; Miami, Florida and Raleigh, North Carolina, with brand and distribution presence in the New York/Tri-state area, Florida, Georgia and the US east coast.
Simultaneous with the acquisition, GraceKennedy has also juggled some senior management roles.
Michael Ranglin has been appointed president and CEO of GraceKennedy Foods USA, while retaining his substantive position as CEO of the GK Foods Division. He will be based in New Jersey, GK said.
“Among the advantages are La Fe’s manufacturing and distribution capability which can immediately be leveraged. We have also long recognised that the Hispanic food and beverage market is one of the largest growing segments in the food market in the United States,” Ranglin commented in the company release.
“We see this as providing a significant opportunity for growth.”
Ryan Mack, who was recently appointed Deputy CEO of GK Foods, will now assume oversight for Grace Foods & Services Company and all of GK’s manufacturing operations. Andrea Coy, senior general manager in charge of GK’s Global Category Management unit, will also have oversight responsibility for the Hi-Lo Supermarket chain and World Brands.
“La Fe was attractive to us for several reasons, including its distribution channels across the East Coast USA and its strong relationships with blue-chip retailers across the US,” said GK Group CEO Don Wehby.
“We are very excited about this acquisition, which we anticipate will be a serious game changer for our food distribution network,” he said.
Wehby said that the strategic acquisition gives GraceKennedy the ability to own its ‘route to market’ network in the US, and presents an opportunity to reach out to Hispanic consumers.
GK said that La Fe transaction is the second major acquisition for GraceKennedy outside of Jamaica for its Foods Division with the first being the acquisition of WT Foods (now Grace Foods UK) in the United Kingdom in 2007.
