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Monde Nissin buys global player Quorn Foods of UK for $831M.

London/Manila- Philippine instant noodles maker Monde Nissin Corp. is buying British meat substitute company Quorn Foods for 550 million pounds ($831 million) to capitalize on rising demand for health foods, in what will be the third largest overseas purchase by a firm in the Southeast nation.

Monde Nissin beat competition from some global food giants to clinch the deal for Quorn, which had sales of 150.3 million pounds in 2014. UK-based investment firms Exponent Private Equity and Intermediate Capital Group, Quorn's owners, announced the sale on Wednesday.

The deal comes as Asian firms are increasingly venturing outside of their home markets in search of targets in the food and drinks sector.

"It's a matter of diversification," Augusto Cosio, fund manager at Manila-based First Metro Asset Management Inc, said on Thursday of Monde Nissin's Quorn buy. "Their income is already too dependent on one market."

Reuters had previously reported that Monde Nissin was among the parties to have shown interest in Quorn Foods. It attracted interest from French yogurt company Danone, Singapore-based Wilmar International, Canadian French fries producer McCain and Ireland's Kerry Group, sources had said.

Quorn is a mycoprotein meat substitute, made by fermenting a type of fungus. It is sold on its own, in ready-meals or in products that replicate burgers, sausages or chicken fillets.

Quorn Foods aimed to benefit from a trend of consumers eating healthier food and less meat. It claims that in the past five years it has cut 60 billion calories from consumers' diets.

Monde Nissin is owned by Betty Ang, the Philippines' 19th richest person, and is planning an IPO as early as 2016. Earlier this year, it bought Australia's Black Swan, a brand of chilled dips, and Nudie, which sells premium juices.

It has ambitions to do larger deals and emerge as a 'health and wellness company, according to one person familiar with the company. The Quorn deal is being funded by Bank of the Philippine Islands (BPI), BDO Unibank Inc and Metropolitan Bank & Trust Co, Reginaldo Anthony Cariaso, chief operating officer of BPI's investment banking subsidiary, told Reuters.

Monde Nissin was advised by Citigroup Global Markets and Courtyard Hill and legally represented by Linklaters. BDO, BPI and Metro Bank supported Monde Nissin in this transaction. Exponent and ICG were advised by Houlihan Lokey, Perella Weinberg Partners and Spayne Linday and legally represented by Allen and Overy. In a statement, the company said the purchase is expected to be completed by October 30.

Quorn is an international meat alternatives business, with market-leading position in 15 countries. It has around 620 employees in three UK sites, in Germany, and in the United States.

Monde Nissin is building a global branded food business, diversifying into categories that focus on health and sustainability. The firm believes that Quorn is a great fit for this strategy and complements its recent acquisition of Black Swan and Nudie, the leading brand of chilled dips and chilled juices in Australia, respectively.

Monde Nissin is the company behind the iconic Filipino brands that have become household names particularly the country's favorite cracker SkyFlakes and seasoning brand Mama Sita's.

The company has been providing Filipinos with flavorful and convenient solutions for their meal and snacking needs, adhering to only the international standards in manufacturing.

Monde's brands include baked goods Monde; noodles and seasoning brand Lucky Me; wafers for snacking options Nissin; cookies Voice and Bingo; crackers SkyFlakes and Fita; milk, yoghurt, and real fruit juice drinks Dutch Mill.

Simon Davidson, partner at Exponent said: "Under Exponent's ownership, Quorn has been transformed into a fast-growing global health brand. Our partnership with the superb management team, led by Kevin Brennan, has created one of the UK's fastest growing food brands as well as a rapidly growing international business."

Quorn's Chief Executive Kevin Brennan commented "We have an ambition to be the world leader in meat alternatives. Monde Nissin's purchase represents a great step forward in this ambition. They share our belief in the potential of Quorn, and provide capability to expand the brand into Asia."

Monde Nissin's CEO Henry Soesanto said: "Monde Nissin has been investing in on-trend, better- for- you products internationally, in-line with our strategy to become a global, diversified food company. Quorn represents an important new leg in our offering. We are excited by the growth potential of the global meat alternatives market, which complements our strategy perfectly."

Chris Graham, partner at Exponent said: "The last 5 years has seen Quorn help reduce a staggering 60 billion calories out of diets, and has had a green-house gas benefit equal to 65,000 cars not being on the road. Under Monde Nissin's ownership, I am confident it will go on to have a profound impact on both health and sustainability.

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Title Annotation:Business News
Publication:Manila Bulletin
Geographic Code:9PHIL
Date:Oct 1, 2015
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