FRUIT distributor Fyffes has made its ninth European acquisition in 18 months with the acquisition of a 50 per cent stake in the Italian distributor Peviani.
The exact price paid by Fyffes has not been disclosed. It is understood that the Irish group will make an initial payment of nearly £3.1 million through the issue of 3.05 million shares for its 50 per cent stake. Fyffes shares are currently trading at 103p.
The deferred consideration will, be based on Peviani's pre tax profits in 1995, 1996 and 1997. "Peviani had pre tax profits of £3 million on sales of £80 million in 1994.
If Peviani's pre tax profits reach £3.5 million in 1996 and 1997 then Fyffes will pay an additional £4.2 million, while there is an absolute cap of £7.5 million on the deferred consideration that Fyffes will have to pay, irrespective of the profits.
Fyffes does not have an option to acquire the 50 per cent of the business being retained by the vendors.
This is Fyffes' first entry into the Italian fresh produce market and is seen as a good investment at a good price. Peviani has been established for almost 100 years and is one of the leading Italian fresh produce distributors.
The group is based in Milan with four other facilities in Italy as well as having offices in Holland, Spain and Germany. It is a significant distributor of fresh Italian and imported fresh produce to large customers particularly in Italy, Germany and Switzerland.
Fyffes chairman Mr Neil McCann described Peviani as an excellent company and added: "This is an important investment for Fyffes. It represents the continued expansion of our European business and provides significant opportunities for Fyffes in new markets."
The joint chief executives of Peviani, Mr Luigi and Mr Giuseppe Peviani who will be remaining with the business said: "Fyffes is an important supplier to us and we are very happy to consolidate this relationship by becoming part of the Fyffes group. We are confident that this co operation will strengthen the position that we currently hold in Europe and we will have the opportunity of developing further the presence of Fyffes in the Italian market."
