Private equity funds CVC and Cinven are among the initial bidders for IRCA, an Italian dessert ingredients manufacturer. PAI Partners also placed a bid for the company. The sale could fetch between 2.5 billion and 3 billion euros (approximately $2.7 billion to $3.2 billion). Preliminary bids were filed last week for the company, which current owner Advent International acquired in 2022 for around 1 billion euros.
IRCA, founded in 1919, employs over 2,200 people and operates 19 production facilities across Europe, the United States, and Vietnam, supplying customers in more than 100 countries. It provides chocolate, creams, and other semi-finished food ingredients, particularly to the pastry and ice-cream sectors. Advent's acquisition of IRCA from Carlyle in 2022 was valued at approximately $1.1 billion at the time.
This potential deal is seen as a test of investor appetite for larger buyouts amidst market volatility, with consumer-focused businesses like IRCA considered resilient. IRCA's growth strategy under Advent has involved both organic and inorganic expansion, including an investment in two large Dobla plants in the U.S. and Vietnam, and a new plant in Italy. The company aims for revenues beyond 400 million euros annually. CVC Credit supported Advent's initial acquisition of IRCA in 2022 and later helped refinance IRCA's capital structure in the bond market.
Italy accounts for roughly half of IRCA's revenues, with France and Spain contributing significantly. The company competes with major players like Swiss chocolate manufacturer Barry Callebaut. Business-to-business suppliers such as IRCA, which serves chefs in restaurants and hotels, tend to have more pricing power than companies targeting end-consumers, making them attractive in an environment of rising energy and raw material costs.
