Kerry Group has announced the acquisition of two US food ingredients businesses for $83 million (€68.4 million).

Custom Industries and Nuvex Ingredients have combined annual revenues of $83.7 million.

Custom Industries operates from two facilities in Missouri and Toronto, Canada, supplying the bakery and ready-to-eat cereal sectors and also providing confectionery ingredients for sweet goods. Kerry said the company had experienced strong growth through leading food manufacturers, food service channels and regional bakeries.

Nuvex, the larger of the two companies, is based in Minnesota and specialises in customised high-protein and fibre nutritional lines.

"The business has well-established core supplier relationships with leading manufacturers of breakfast cereals, functional foods and nutritional snacks," Kerry said.

It added that the acquisitions were consistent with its "strategy of investing in and expanding the group's technical capabilities in nutritional and wellness food categories".

The acquisitions, which complement Kerry's existing operations in the US and Canada, add new proprietary technologies and valuable production capacity to meet the company's growth plans, it said.

Analysts welcomed the additional capacity the acquisitions should bring and said they would have "a small but positive" impact on the company's earnings. Shares in Kerry added five cent to €19.60 yesterday in a generally weaker market.

Both acquisitions are being funded from existing resources.

When it released its 2005 results at the end of February, Kerry's chief executive Hugh Friel indicated that a number of bolt-on acquisitions were in the pipeline. Mr Friel said Kerry expected to do one or two bolt-on deals in the first half, followed by up to three in the second half.