23 October 2006 - Zetar, the AIM listed confectionery and snack foods group, is pleased to announce that it's wholly owned subsidiary Kinnerton Group Limited (“Kinnerton”) has acquired the entire issued share capital of Salamanda for a total consideration of up to £2.25 million. Salamanda is a manufacturer of a premium range of chocolate and yoghurt coated fruit and nut products.
Initial consideration of £1.2 million has been satisfied by the payment of £900,000 in cash and the issue to the vendors of 66,964 new Zetar ordinary shares of 10p each. Application has been made for these new Ordinary Shares to be admitted to trading on the AIM Market of the London Stock Exchange. Following such admission, Zetar will have 10,713,165 Ordinary Shares in issue.
Additional consideration of up to £1.05 million will be payable in cash or Ordinary Shares dependant upon the future performance of Salamanda. The maximum additional consideration will become payable in the event that Salamanda achieves profit before tax of at least £400,000 and £550,000 in the two years ending 30 April 2008 and 30 April 2009 respectively.
Salamanda, based in York, was established in March 2004. Its founders, Joe Horsley and Mike Flower will continue to manage the business post acquisition as part of the Kinnerton Group.
Salamanda specialises in the development and manufacture of coated products known as ‘dragees’, including yoghurt coated raspberries, chocolate coated strawberries and cocoa dusted roasted almonds. Salamanda will be adept at manufacturing both fair trade and organic products. In the year ended 31 December 2005, Salamanda had sales of £1.1 million and profit before tax of £102,000.
The acquisition of Salamanda will enable Kinnerton to innovate a wider range of new products, especially in developing its ‘all year round’ confectionery product offering ,with an emphasis on healthier snack lines.
Commenting on the acquisition, Clive Beecham, Group Managing Director of Zetar and Kinnerton said:
“Joe Horsley and Mike Flower bring with them a family confectionery heritage that stretches back over 150 years, so enabling Kinnerton to further develop its premium adult everyday confections. They are acknowledged experts in the creation of premium fruit and nut dragees that are perfectly placed to enhance the Group’s portfolio of healthier eating snacks.
Salamanda products already sit on many of the major multiples shelves and as part of Kinnerton, it is anticipated that we ought to be able to grow their distribution and invest in their manufacturing effectiveness.
The opportunity to work with everyone at Salamanda is a welcome one for all of us at Kinnerton as it comes off the back of 30 years of commercial friendship.”
The Group will make a pre close trading update announcement in the week commencing 6 November 2006.