Ion Equity emerges as unsolicited Reox bidder

Dublin private equity firm Ion Equity has emerged as the suitor behind an unsolicited bid for the consumer foods unit of Reox Holdings, which is speculated to have a valuation in excess of €200 million.

While neither party would comment on the process, Ion Equity is understood to have made an approach some weeks ago to buy out Reox's portfolio of well-known food brands that includes Galtee, Dairygold, Mitchelstown, Shaws and Calvita.

The brands are controlled by Breeo Foods Ireland, the consumer food division of Reox, which itself is a spin-off from Dairygold. The Irish brands currently have annual sales in the region of €240 million, it is believed.

Reox has been weighing its options since making an approach from an unidentified suitor public on September 20th.

Ion, led by financier Neil O'Leary, is best known as the group behind the Topaz consortium, which followed its acquisition of Shell's fuel distribution in Ireland with the takeover of its rival, Statoil Ireland.

While the approach from Ion is considered likely to prompt further interest in Breeo's Irish activities from other players in the sector, Reox has not yet said whether it will initiate a formal sale process.

The company is taking advice but it has said it would consider an offer only if it represented "substantial and compelling" value for its shareholders, who are all members of the Dairygold co-op. It has adopted a "business as usual" approach pending clarity on the situation.

However, Breeo has been a seller of assets in the very recent past. In August the division sold the ice cream business of its distribution subsidiary Superchill to Northern Ireland dairy company Dale Farm. That transaction, which gave Dale Farm the west of Ireland distribution rights to the Mars and Häagen-Daz brands, saw Breeo leave the ice cream sector. It said then ice cream was not a core sector for the business.

Reox said earlier this year it would invest €50 million in Breeo Foods by the end of the year and was seeking acquisitions to expand its activities in the Netherlands. Breeo Holland has doubled its turnover in the past three years to €60 million and has a target turnover of €100 million next year.

© 2007 The Irish Times

This article appears in the print edition of the Irish Times