Glanbia buys Seltzer, becomes pan-Atlantic customised formulator

With three facilities in San Diego, California, Seltzer specialises in nutritional premixes and the development and bulk distribution of amino acids, vitamins and minerals.

The acquisition gives the Irish company's growing international customised formulation activities a third arm, and marks its first entry into the US specialty chemicals market. Its existing US operation deals only with whey ingredients.

Glanbia has invested heavily in establishing a custom formulation presence in Europe; in July it acquired UK-based Pro-Fibre Nutrition, now known as Glanbia Nutritionals UK for an undisclosed sum, and in 2004 German-based Kortus Food Ingredients Services (KFIS) for €14.5m.

A spokesperson for the company said that although Seltzer's focus is currently on the US, it will be closely integrated with the other two locations and they will all work together on a pan-Atlantic basis. Pursuant to approval by the US Federal Trade Commission, the transaction should close in October. The existing team led by Wayne Seltzer will continue to run operations. Glanbia group managing director John Moloney said that Seltzer is expected to be "earnings enhancing in 2007"."It also advances the international development of the group into key global growth markets," he said. The announcement of the acquisition coincides with the release of Glanbia's interim results for the first half of 2006, in which group revenue was €922.8m, profit after tax €26.9m and adjusted earnings €0.0912 per share - all around last year's H1 levels. The Food Ingredients and Nutritionals division, of which Glanbia Nutritionals is one of three business unites (with Food Ingredients Ireland and Food Ingredients US) saw a €36.4m decline in revenue to €504.9m, and operating margin down from 4.1 to 2.4 per cent. This was attributed mainly to a downturn in performance of Irish Food Ingredients, which is feeling the squeeze of ongoing EU dairy reform that reduces industry supports, and lower world dairy prices. Although the figures for Glanbia Nutritionals are not split out from the division overall, the company said it "delivered good revenue growth, mainly in new product development and acquired businesses, both of which performed well… A good performance is expected in this business in the second half."