In a deal worth €355m and 900 jobs, Kerry will buy into the bio-ingredients and pharma-ingredients business of Quest - that posted a turnover of €205m in 2003 - including protein hydrolysates, emulsifiers, hydrocolloids and fermentation products. Kerry it seems is particularly taken by the pharmaceutical platform.
'The addition of Quest brings in new technologies and customers, linking up the food, beverage and pharmaceutical industries - an area for development in the years ahead,' said Frank Hayes, director of corporate affairs at Kerry.
'Quest has a longstanding relationship with the pharmaceutical industry - through hydrolysed proteins used in cell tissue culture, specialist ingredients for tabletting, therapeutic and nutritional products,' said Kerry group chief executive Hugh Friel in a statement yesterday.
Slated for completion by the end of April, the deal comes only weeks after ICI announced a 4 per cent dip in food sales at Quest for the fourth quarter. A company troubled by lost business dating back to 2002 and the impact of software problems.
But ICI is confident that shaking off the ingredients arm of Quest, as well as imminent restructuring plans yet to be announced but expected to have a cash cost of £11 million, will restore profitability to Quest's core flavour and fragrance business.
"At Naarden, The Netherlands we have just completed a €25million new creative centre. This is the first of many investments," said a spokesperson for Quest.
Adding that the company will continue its strategy to become the number one flavours and fragrance company in terms of 'renown, reputation and innovation'. Both Kerry and Quest stressed that it was business as usual for ingredients supplies, with each customer, according to the Irish purchaser, receiving a 'full briefing pack' in the forthcoming days.
Ingredients are about a fifth of sales at Quest and represent a fifth of employees. As part of the deal, Quest Ingredients will continue to supply ingredients to Quest Flavours and fragrances.
"We look forward to a smooth transition. This is a stand alone business," said Frank Hayes.
The London stock exchange welcomed the news yesterday, sending shares at ICI to a day high of £249.75, up from £241.50. ICI announced that the net proceeds from the sale of the ingredients business - after tax and other costs expected to be £197 million, - will be used to reduce group debt.