September 7, 2017 / 5:31 AM / 19 days ago

Barry Callebaut strengthens U.S. gourmet business

ZURICH (Reuters) - Chocolate maker Barry Callebaut AG (BARN.S) has bought the ingredients division of family-owned U.S. firm Gertrude Hawk Chocolates in a move designed to strengthen the Swiss company’s high-margin gourmet and specialties business.

The acquisition, made for an undisclosed sum, comes as chocolate makers grapple with weak global demand as health-conscious consumers increasingly shun chocolate.

“The acquisition allows us to expand our product portfolio into new markets and offer an even wider range of products and services than before,” Barry Callebaut Chief Executive Antoine de Saint-Affrique said in a statement.

Barry Callebaut, which makes chocolate for major food companies such as Nestle (NESN.S) and Unilever (ULVR.L) (UNc.AS) through outsourcing deals, also supplies chefs with premium ingredients through its gourmet and specialities business.

Sales volumes at that business rose 11.6 percent in the first nine months of the company’s fiscal year, making it the fastest-growing division. For the group as a whole, sales volumes rose 2.8 percent.

The world’s biggest chocolate and cocoa product maker said the Gertrude Hawk ingredients business had an ultra-modern factory in Scranton, Pennsylvania, and employed 370 staff.

The company, which had revenue of about 70 million euros ($85 million) in 2016-17, is a leader in innovative processes for ice cream and bakery ingredients, Barry Callebaut said.

“We see the bolt-on deal as a good strategic fit and a slight positive news,” Baader Helvea analyst Andreas von Arx said in a note. He has a “Hold” recommendation on the stock.

Zurich-based Barry Callebaut has been stepping up its acquisitions of gourmet food companies, an area where businesses are typically small, family-owned companies operating locally.

It announced the acquisition of Italy’s D‘Orsogna Dolciaria, which makes decorations for ice cream, dairy and bakery products, in July.

The Gertrude Hawk acquisition is expected to close in October and is subject to regulatory approval.

Reporting by Silke Koltrowitz; editing by John Revill and David Clarke

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