Global catering equipment giant Welbilt has agreed a $224m (£160m) deal to take over Crem International, signalling its entry into the hot beverage market and giving it a readymade portfolio of professional coffee machines to supply to its customers.
Welbilt will acquire 100% of the shares of Avaj International Holding AB, which trades as Crem and is majority-owned by private equity firms Priveq Investment Fund IV and SEB Venture Capital.
The acquisition will be funded through cash on hand and existing credit lines and is expected to close in the second quarter of 2018, subject to certain closing conditions.
Crem International is a global manufacturer of professional coffee machines with more than 50 years of experience in the market and sales in more than 80 countries. Last year it posted a turnover of $90m.
It is headquartered in Solna, Sweden, and has three manufacturing sites in Åmotfors, Sweden, Gandia, Spain, and Shanghai, China. These plants are supported by three R&D centers and six sales offices.
Crem develops, manufactures and markets coffee machines under three brands: Coffee Queen, Expobar and Spengler for use in offices, restaurants, cafes and coffee shops, catering and convenience stores.
“The acquisition of Crem International is the first step in realising our ambition to complement our organic growth strategy with select bolt-on acquisitions,” stated Hubertus Muehlhaeuser, Welbilt’s president and CEO (main picture). “Crem expands our full-line of commercial foodservice equipment coverage by adding the fast-growing hot coffee category to our portfolio, which gives Welbilt the broadest portfolio of hot and cold beverage equipment of any company in the market.
“Crem is very strong in Europe and Asia, supporting our strategic objective of expanding our presence in these two important regions. We foresee significant cross-selling opportunities between Crem’s and Welbilt’s respective customer bases in those regions, and see further opportunity to bring Crem to Welbilt’s customer base in the US and include it as a core offering in our fitkitchenSM system solutions.”
The acquisition is expected to be accretive to Welbilt’s earnings beginning later in 2018 and beyond, with run- rate synergies expected to grow to approximately $10m (£7m) by 2020.