Elite Industries (TASE:ELEI1; ELEI5) today announced that its subsidiary, Elite International, yesterday signed a memorandum of understanding (MOU) with Beyers Koffie. Beyers will buy Elite's stakes in Belgian company Fort and Dutch company Klaverblad for €5.5 million. Fort and Klaverblad produce and sell private label coffee.
Beyers Koffie is a partly Italian-owned Belgian company that competes in the Belgian market. Beyers wanted to acquire Elite's operations before; in 1999, it submitted a €10 million offer to the Elite board of directors, but was refused.
Most of Fort's business in Belgium is roasting and grinding private label coffee for major retailers in Belgium, the Netherlands and the UK. Klaverblad is a marketing company for the Dutch market, distributing Fort and other companies' products. As a result of the sale, Elite will no longer operate in these countries.
The final contract is scheduled to be signed two months from the date the MOU was signed. Elite stated that if the deal is completed, the sale is unlikely to significantly affect its business results.
Elite's private label business in Europe has posted heavy losses in recent years, and it was clear that the company's cost-cutting measures, intended to make Elite International profitable in 2004, would involve the closing of loss-making activities. Elite's private label businesses in Europe were mostly coffee in Belgium and chocolate in France. Elite stated in its 2003 financial report that it lost NIS 1.83 million on NIS 220.6 million in revenue from its private label activities.
Published by Globes [online] - www.globes.co.il - on January 28, 2004