We invested in Nomad (NOMD, Financial) in the second quarter of 2015 and a member of our investment team, Brian Welch, joined the board. Our investment was made in conjunction with the company’s formation and its acquisition of Iglo, a leading European branded frozen food company with a strong position in the UK, Italy, and Germany. Stefan Descheemaeker was hired as CEO to lead the new company.
Nomad followed its initial transaction with the highly synergistic and complementary purchase of Findus’s non-UK assets in August 2015. The Findus acquisition helped to fill out Nomad’s geographic footprint with leading positions in the Nordic countries and France, and together with Iglo, created the leading branded frozen food business in Western Europe.
The combination of Iglo and the Findus assets provided a strong foundation for Nomad as a newly formed public company. That said, the company’s first several quarters were disappointing as the strategy under the prior Iglo management team had focused too much on new frozen food categories at the expense of its core offerings. That strategy drove weak topline trends shortly after Nomad’s acquisition of Iglo was completed.
The new team, led by Stefan Descheemaeker, and under the oversight of the board, did a superb job shifting its strategy to focus on core offerings or “Must Win Battles.” This strategy shift drove sequential improvements in sales trends for seven straight quarters. In 2017, the company achieved organic sales growth of 1.1% in Q1 and 3.5% in Q2; full-year guidance calls for positive low-single-digit growth. As a result of this resumption of growth, Nomad’s shares increased by 49% from the beginning of this year to our exit.
We sold our entire Nomad investment in September for $14.16 per share, an increase of 35% from our average cost in just over two years.
Share Buyback Program
On November 8, 2017, we announced an amendment to the terms of the share buyback program that permits share purchases on Euronext Amsterdam, alongside the London Stock Exchange (“LSE”). This change is intended to increase the pace at which the program can be executed. Jefferies International Limited, PSH’s agent, may effect on-market purchases of shares from time to time at its absolute discretion on the LSE and Euronext Amsterdam provided that the maximum price payable for a share may not exceed the higher of the price of the last independent trade and the highest current bid stipulated by Article 3(2) of the Commission Delegated Regulation (EU/2016/1052).
The aggregate volume of shares purchased under the Program on each trading day shall not exceed 25% of the average daily volume traded on the trading venue on which the share purchase is carried out in the 20 trading days preceding each day on which share purchases are made.
Pursuant to the Program, which commenced on May 2, 2017, PSH has, to date, purchased an aggregate of 3,330,185 shares for a total consideration of approximately USD $47.65 million at a weighted average discount of 19.2%
From Bill Ackman (Trades, Portfolio)'s third quarter 2017 shareholder letter.
