Thanks in part to a recent capital raising, European frozen foods giant Nomad Foods, which holds the Birds Eye, Iglo and Findus brands, is now sitting on €750 million ($842 million) in cash, which executives intend to use for future mergers and acquisitions.

"We will be selecting those on the basis of the financial returns that they will deliver," CEO Stefan Descheemaker told analysts during the company's conference call.

Descheemaeker highlighted the performance as he outlined the company's ninth sucessive quarterly reporting period of "organic growth" that he attributes to investment in the Bird's Eye brand in the UK, Iglo in continental market, as well as Findus lines.

Where will it decide to go next?

For an independent view of Nomad's strategy IntraFish asked market analysts covering the company for their insight.

CJS Securities analyst Jon Tanwenteng said while Nomad is venturing outside of seafood and vegetables it has not moved outside its comfort zone because it has frozen meals and other frozen products, meaning the company is likely to continue on that path.

“If you get a direct seafood one that’s great but if you are into a different vegetable, pizzas on the mainland or something like vegan alternatives then those will still flow very nicely into what they have.”

Although Nomad has been dipping its toes into the US market, UBS analyst Steven Strycula said he thinks the next acquisition is more likely to be in Europe.

"I think they will stick very much to frozen acquisitions within their portfolio," Strycula said. "They are very disciplined about sticking to what they know."

While Nomad may be understandably happy with its success in Europe, such companies without a "beachead" asset are likely to overpay to enter the US marketplace, in Strycula's view.

Left-field choice?

One candidate for acquisition could be Nestlé's up-for-sale frozen pizza and ice cream business in the United States.

Nomad expanded its frozen-foods business swooping to buy the Goodfella’s Pizza business for €225 million ($252 million) in January 2018.

Five months later it announced the acquisition of UK-based frozen potatoes and Yorkshire pudding maker Auntie Bessie's for around €240 million ($269 million).

"If I had to speculate I would say they would go potentially into something like pizza, obviously Western Europe based," said a third analyst who was struggling to name a suitable available asset in the areas of fish or vegetables.

Moving outside of these sectors into pizza for example may avoid the company getting bogged down in antitrust issues, the analyst said, adding a caveat.

"These guys are very crafty and savvy acquirers so there may be something totally different that we never thought of."

Finance

Birds Eye, Iglo parent readies $840 million M&A shopping spree