Wed, 21 Mar 2018
DENMARK - Through the acquisition of the Danish pepperoni giant DK-Foods the Danish Crown group will become a European market leader in pepperoni toppings for pizzas. DK-Foods will operate as a separate business unit under Danish Crown's subsidiary Tulip Food Company and will spearhead the group's global focus on pizza toppings.
Pizza is the favourite choice of fast food in Denmark, and the same is true in many other parts of the world. Pepperoni is an extremely popular pizza topping, and as part of its 4WD strategy, Danish Crown and its subsidiary Tulip Food Company are pursuing an ambition of becoming the preferred supplier to the European pizza industry. Danish Crown has, with immediate effect, acquired the pepperoni giant DK-Foods, Europe's leading manufacturer of pepperoni for the pizza industry.
"We're delighted that the deal has fallen into place. In acquiring DK-Foods, we are acquiring a focused and unique company which, since its establishment in 2003, has enjoyed impressive growth. At Tulip Food Company, our strategic focus internationally is on four categories: bacon, canned products, snacks and pizza toppings, so we're looking forward to incorporating a well-run, agile and fast-moving business. The acquisition of DK-Foods represents a giant leap forward when it comes to realising our bold ambitions within a category which is experiencing growth in many markets, and the acquisition will bring us even closer to our pizza customers," said Kasper Lenbroch, CEO at Tulip Food Company.
Danish Crown has been DK-Foods' preferred supplier of raw materials for several years. At the beginning of 2016, DK-Foods sold 70 per cent of its shares to Maj Invest Equity, while the executive board, comprising Steffen Ramsgaard and Per Fischer Larsen, retained the remaining 30 per cent. In taking over the company, Danish Crown is acquiring all the shares in DK-Foods, but Per Fischer Larsen and Steffen Ramsgaard will remain on the executive board. They will report to Kasper Lenbroch.
"We're both delighted and proud that DK-Foods is now becoming a part of the Danish Crown group, which, like us, has ambitious plans for the pepperoni category. Over the past 15 years, we have evolved from being a niche producer into a very significant market player, and as part of Danish Crown, we see new and great opportunities for continuing this positive growth. We'll be strengthened through the upstream integration of raw materials and given the group's ambition of of becoming a leading player in the wider toppings category, we'll become an even stronger partner for both our current and future customers," said Per Fischer Larsen and Steffen Ramsgaard.
"We've been on a fantastic journey with DK-Foods, and together with the management, we've achieved our growth targets far earlier than expected. Thanks to its successful and customer-centric strategy, DK-Foods has won several major customers and seen increased activity levels as a result of existing customers rolling out their products on new markets. This has led to a doubling of production capacity. With the sale to Danish Crown, DK-Foods will benefit from a strong and integrated supply chain, which – based on DK-Foods' strong market position and focused strategy – will support future growth," said Per Høholt, partner at Maj Invest Equity.
Tulip Food Company produces a wide range of pizza toppings, including pepperoni, at its factory in Svenstrup south of Aalborg. With the acquisition of DK-Foods, Tulip will increase its production capacity significantly, and while the clear focus on foodservice and retail markets remains, the Svenstrup operation will also establish capacity for production of heat-treated products for the Chinese market.
"DK-Foods presents an opportunity to intensify our group's strategic focus on pizza toppings by becoming the market leader in pepperoni. The pizza market is growing globally, and we see considerable potential in DK-Foods. We'll be able to process a larger proportion of our own raw materials, thereby boosting our growth and earnings potential for the benefit of our owners – the Danish farmers," said Jais Valeur, Group CEO of Danish Crown. Danish Crown has acquired DK-Foods with immediate effect.