Sunday, February 5, 2023

Orkla invests in US ice cream ingredients business

Orkla Food Ingredients (OFI) has entered into an agreement to purchase 84% of the shares in Denali Ingredients, which is a leading ice cream ingredients business in the USA.

Denali Ingredients has seen strong organic growth of more than 10% p.a. over the past 15 years. The company is headquartered in Wisconsin, where it carries out manufacturing at two facilities and has 160 employees in total.

“The acquisition of Denali Ingredients is a significant and natural step for OFI into the market for ingredient solutions for the US ice cream industry. The food ingredients sector is fragmented with significant potential for further consolidation and growth. Based on these opportunities we will now initiate a process to seek a long-term partner for OFI to accelerate growth and value creation,” says Nils K. Selte, president and CEO of Orkla.

Denali Ingredients develops and manufactures ingredient solutions for the US ice cream industry, complementary with OFI’s strong position in the European market for ice cream and confectionery ingredients. The new business will be part of OFI’s Sweet Ingredients vertical.

“With this acquisition, OFI is strengthening its position as a leading ingredients supplier to the bakery, ice-cream and confectionery industries. We have a stated strategy of increasing our exposure to markets and categories with higher growth and margins. Denali Ingredients, with its leading position in the attractive US market, fits well in this picture. With the addition of Denali Ingredients to our group, OFI will increase the size of its Sweet Ingredients area by 45%,” says Johan Clarin, Orkla EVP and CEO of OFI.

The seller is Denali Companies LLC, owned and operated by the founding family of Wally and June Blume. Denali Ingredients encompasses the entities Denali Ingredients LLC, Denali Staffing LLC, Denali Investment Properties LLC and Denali Equipment LLC. The seller and Denali Ingredients CEO Neal Glaeser will as part of the transaction invest in Denali Ingredients with a combined stake of 16%. Mr Glaeser will continue in his role as CEO.

“We are very pleased to become part of OFI, which is already a major player in Denali’s categories in Europe and with a deep understanding of our industry. I am convinced that together we will continue Denali’s journey of growth and value creation. As a team we look forward to a fruitful partnership and cooperation,” says Neal Glaeser, CEO of Denali Ingredients.

The transaction values Denali Ingredients at $200 million. The transaction is subject to regulatory approval and is expected to be completed in the fourth quarter of 2022.

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