Food recycling company Darling International (NYSE:DAR) inked a deal on Monday to buy the specialty ingredients division from Vion Holding for $2.2 billion.
In a competitive auction, Irving, Texas-based Darling bested offers from private equity firms Advent, Apollo (NASDAQ:APOL), CVC and Permira. Vion hired Bank of America Merrill Lynch (NYSE:BAC) as an adviser earlier this year.
Vion Ingredients makes specialty ingredients from animal origin for use in food, feed, pet food, fertilizer, bio-energy and pharmaceuticals. Darling said their combination will create a leader in converting edible and inedible bio-nutrients into specialty products.
“This transaction will further diversify Darling International's revenue and EBITDA profile both geographically and from a product line point of view,” Darling CEO Randall Stuewe said in a statement.
Vion reported annual revenues of 1.7 billion euros ($2.3 billion) for the period ended June 30.
The Dutch company will continue to be led by current CEO Dirk Kloosterboer. In addition to overseeing Vion’s global workforce of 5,700, he will also be named chief operating officer of Darling and added to the company's board.
The deal is slated to close in January 2014, subject to certain approvals and other conditions.
Darling, which was advised by and received financing support from JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and BMO Capital Markets, said it will fund the transaction through debt and cash.
It sees the deal being “immediately accretive” to earnings per share.