Foods group IAWS is close to a deal to acquire the privately-owned Roma Foods, The Irish Times has learned. It is understood that IAWS will pay around €12 million (£9.4 million) for Roma, which distributes a range of food products under the Roma brand.

IAWS finance director Mr David Martin would make no comment and Roma's managing director and major shareholder Mr Dermot Divilly was unavailable for comment. It is understood, however, that a deal is almost concluded. ...

If the sale goes ahead at a €12 million price tag, it will see Mr Divilly - who owns just over half of Roma - receive more than €6 million, while another major beneficiary will be Dr Pat Loughrey whose 25 per cent of Roma is worth about €3 million.

This will be the second time in just four years that Dr Loughrey has been involved in the sale of a business to IAWS. In 1997, he and his partner Mr Ronan McNamee shared €65 million when they sold their Cuisine de France bakery business to IAWS.

Mr Divilly is a former managing director of the distribution group Allegro, but left that company in mid-1999 when Allegro merged its operation with the Fyffes subsidiary Gillespies. Around the same time, Mr Divilly and Dr Pat Loughrey bought the Roma brand from Allegro for £3.1 million (€3.9 million).

Allegro, however, retained the distribution contract for Roma products, although there must be serious doubts about retaining this contract once the IAWS takeover is completed because IAWS has its own extensive distribution operation.

When the sale of Roma to Mr Divilly and Dr Loughrey was completed, it accounted for about 15 per cent of Allegro's turnover.

The latest Companies Office accounts for Roma are for the period from September 1998 to May 2000. During this period, Roma had sales of £9.3 million and had pre-tax profits of £1.1 million.

Industry sources said that under IAWS ownership, Roma would undoubtedly be able to improve its operating margins through savings in marketing and distribution.

One industry source described Roma as a "virtual company" as it has no manufacturing, packaging or distribution operations of its own as all these operations are outsourced.

Roma distributes a range of food products under the Roma name, including rice, pasta, canned tomatoes, olive oil, pesto, sauces and a range of ready meals. When the takeover is completed, it will be integrated into IAWS's Shamrock Foods operations, which include the distribution of a range of fast-moving consumer goods such as Shamrock bakery products, Punjana tea, Pak juices, Delmonte tinned products and Irish Cone & Wafer products.