Tropical fruits distributor was acquired by Japan’s Sumitomo this year for €751m
Fyffes’s profits dropped last year as the tropical fruits distributor booked a charge of almost €32 million for advisers’ fees, management bonuses and share option conversions relating to its recent takeover by Japan’s Sumitomo Corporation.
Net profit at the Dublin-based company fell by almost 60 per cent to €11 million, according to accounts recently filed for the now limited company with the Companies Registration Office.
However, adjusted earnings before interest, tax and amortisation rose by 9.3 per cent during the period to €50.1 million. That was towards the lower end of the company’s most up-to-date guidance before it announced the takeover last December.
The earnings were boosted by the group’s foray into the mushroom business through its acquisitions in 2016 of Canadian companies Highline Produce and All Seasons Mushrooms for a combined €140 million.
Sumitomo completed its €751 million takeover of Fyffes in February, ending the company’s 35 years as a Dublin-listed company.
It resulted in a €87.5 million payment for a 12 per cent stake held by the family of executive chairman David McCann, whose grandfather, Charles, laid the foundations for the group when he opened a fruit-and-vegetable shop in Dundalk in 1902.
Documents published late last year in relation to the takeover showed that Mr McCann and other executive directors, who have remained with the business, were entitled to as much as €3 million in bonus payments in relation to the deal.
“The group has accrued total costs amounting to €31.9 million, including professional and advisory fees, various bonus and incentive payments to management in 2017, payment of which is subject to the passage of time, and the acceleration of share options expenses which would have been recognised in 2017 and 2018,” Fyffes said in the financial report.
A spokesman declined to give a breakdown of the various fees. However, he confirmed that the professional and advisory fees related solely to expenses incurred by Fyffes during the transaction, with the wider Sumitomo Corporation absorbing the Japanese group’s costs.
Fyffes’ financial advisors on the deal were Lazard and Davy. Its annual report lists solicitor firms Arthur Cox in Dublin, King & Wood Mallesons in London and Holland & Knight in Florida as its legal advisers.
The financial results show that Fyffes’ total revenue, including the share of joint ventures, rose to €1.4 billion last year from €1.2 billion in 2015. The company’s net debt stood at €138.9 million at the end of last December.
Source: The Irish Times