Devro agrees to £667m takeover by Germany’s Saria

Glasgow-based sausage skin and food collagen products firm Devro said on Friday it has agreed to a takeover by German food manufacturing company Saria SE & Co KG.

Devro said its directors intend to unanimously recommended Saria’s cash offer of 316.10p per Devro share.

The deal gives Devro a £540 million equity value and £667 million enterprise value, including debt.

The offer represents a 65% premium to its 192p closing price on Thursday.

Devro also said the offer represents a 92% premium to its closing price of 164.8p on October 25, 2022, “being the last business day before receipt by the Devro board of Bidco’s conditional indicative proposed offer.”

Shares in Devro were up about 60% to 307p in London on Friday morning, giving it a market capitalisation of around £515 million.

Saria’s 2021 revenue was around €3 billion, compared to Devro’s annual revenue of £252.4 million.

Separately, Devro said it “traded strongly” in the four months to October 31. Revenue was up 16% year-on-year, or 10% at constant currency.

“Constant currency revenue growth was driven by higher pricing, successful recovery of inflation, as well as good volume increases led by our mature markets,” said the Glasgow firm.

“Volume growth continues to reflect the successful execution of our strategy. Operating margins in the period were up on the prior year and well ahead of those achieved in the first half.”

Devro said current trading is “slightly ahead of the board’s expectations.”

Devro chairman Steve Good said: “The Devro board believes that the offer from Saria, which represents a premium of 92 per cent. to the closing price on the last business day before receipt by the board of Bidco’s conditional indicative proposal, reflects the strength of Devro, our medium-term prospects, and recognises the substantial improvements made to the company through the successful implementation of our growth strategy.

“The offer also provides an opportunity for Devro shareholders to crystallise, in cash, the value of their investments at a fair and reasonable value.

“Furthermore, under the ownership of Saria, the combined business will have an enhanced product offering; will be a stronger more diversified group of scale; and will look to further accelerate long-term sustainable growth.

“We believe that Saria’s understanding of our markets, its strong financial position and the cultural fit will benefit the group’s business and employees.

“As a result, the Devro directors have agreed unanimously to recommend that Devro’s shareholders accept the offer from Saria.”


Reporter: Greg Rosenvinge

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