A new consumer foods brands company, Valeo Foods Group, has been formed with the merger of Batchelors and Origin Foods.
Origin Enterprises has agreed a deal to set up the new company with backing from UK-based private equity company CapVest.
Valeo, in which Origin will have a 45% equity stakeholding, has also reached a deal to buy 100% of the branded food business of Origin (Origin Foods) and the Irish food company Batchelors.
The deals are all subject to a number of conditions including clearance from the Irish Competition Authority.
Origin Foods owns three of the country's most known food brands - Odlums, Shamrock and Roma. It also has extensive manufacturing facilities and services the major retail, bakery and foodservice channels. As well as its well known beans and peas brands, Batchelors owns Erin, Squeez juices, Amigo and Lustre.
Under the terms of today's deal, Origin Enterprises will sell Origin Foods to Valeo based on an enterprise value of €78m. It will hold a 45% stake in Valeo and will receive €26m on completion of the deal with another €35m to be paid later. CapVest will own the remaining 55%.
The head of Origin Foods, Peader Kearney, will become CEO of Valeo while Aidan O'Bryrne, Finance Director of Batchelors, will become CFO of the new company.
'The creation of Valeo marks a signficant repositioning of the Origin Group and facilitates a sharpening of our strategic focus as we prioritise the development of the group's agri-services platform,' commented Origin Enterprises' CEO Tom O'Mahony.
Shares in Origin Enterprises closed up 7.6% at €2.70 in Dublin.