U.S – Diversey Holdings, Ltd., a leading provider of hygiene, infection prevention and cleaning solutions, has announced it has concluded the acquisition of Birko Corporation, a North American manufacturer of food safety chemical solutions for the food and beverage industry, and Chad Equipment LLC, a subsidiary of Birko Corporation.
Chad Equipment manufactures food safety equipment for the protein industries, with approximately 100 employees in total.
With estimated 2021 sales of more than US$40 million, this acquisition strengthens Diversey’s market presence in the United States and Canada, enhancing its scale, service and product offering, and creating numerous cross-sell and revenue opportunities as a truly global provider in the food and beverage industries.
Commenting on the transaction, Edwin van der Heijden, Diversey’s VP North America Food and Beverage said the combination of Diversey, Birko and the Chad Equipment Division will provide their customers with an advanced range of solutions that protect food safety, improve operational efficiency and increase the sustainability of their operations.
“We anticipate enhanced value for our customers, combining innovative chemistry, state-of-the-art equipment and engineering expertise into leading solutions for all sectors in the food and beverage industry,” he said.
Diversey’s Chief Executive Officer, Phil Wieland, noted that closing this transaction is the first investment facilitated by the company’s recent equity raise to accelerate growth and drive shareholder value, as reported by GlobeNewswire.
“We are truly excited to combine Birko and Chad’s expertise with our North America food and beverage business. This acquisition is representative of our deep pipeline of growth investments and we will continue to pursue strategic and accretive M&A opportunities in the large, fragmented markets in which we operate. With this acquisition, we believe Diversey’s food and beverage business now has the #1 or #2 market position in every region, which further enhances our ability to win business with global customers,” he expressed.
He noted that within the U.S., Birko and Chad’s sales, service and manufacturing footprint will significantly improve their capability to serve customers, particularly in the central and western United States.
“Although the purchase agreement with the seller prohibits us from disclosing specific financials and deal terms, I can reiterate our M&A strategy is to acquire great businesses at 6x to 10x EBITDA with a medium-term post-synergy multiple of 5x to 6x, and I can confirm this deal is consistent with that strategy,” he said.
Kelly Green, Chairman, President and third generation owner of Birko Corporation, explained that the sale of the Birko and Chad business to Diversey represents an opportunity to continue the company’s proud legacy of protecting the food chain with the resources and backing of a global leader.
According to Mark Swanson, Birko’s CEO, Birko has a shared philosophy built around food safety and protecting the entire food chain.
Birko is an integration of environmentally responsible chemistry, state-of-the-art equipment, and custom technological solutions for the meat, produce, and beverage industries.
“We look forward to bringing both companies together and providing exceptional solutions for the food and beverage industry,” said the CEO.