Good day, and welcome to the Kerry Group market update conference call . Today's conference is being recorded. At this time, I would like to turn the conference over to William Lynch, Head of Investor Relations. Please go ahead.
Thank you, operator. Good morning, welcome to our update call to discuss Kerry's acquisition of Niacet. I'm joined on the call by our CEO, Edmond Scanlon, our CFO, Marguerite Larkin, and Dr. Albert McQuaid, our Chief Technology Officer. We will take you through a brief presentation outlining the transaction, which is available on our website. Following this, we will open the lines for questions. Before we begin, please note the usual disclaimer regarding forward-looking statements. I will now hand over to Edmond.
Thanks, William. Good morning, everyone. Thank you for joining the call this morning. We're delighted to announce that we've reached agreement to acquire Niacet, a global leader in preservation technologies. We're looking forward to welcoming the talented Niacet team to Kerry and have been very impressed with their passion for innovation as well as their product and process expertise. Today marks another important step as we systematically execute against our food protection and preservation strategy. This is a market that's growing strongly, and while Kerry is playing a key role in meeting many of the most complex challenges in the market, probably none is more relevant right now than ensuring food is safe and food reaches more people. The reduction of food waste through preservation is a key element of how Kerry is leading the drive towards a world of sustainable nutrition through preservation.
Preservation does two things. Firstly, by protecting and extending food shelf life, this means people have more time to consume food products, thereby reducing waste. Secondly, preservation is about keeping that food safe and protecting consumer health. Moving on and beginning with slide three of the presentation and the strategic rationale. I'm going to give you an overview of Niacet's business, how it strongly aligns with our preservation strategy, the significant and growing global market demand, and how this business will extend and accelerate Kerry's sustainable nutrition impact. Albert will provide examples of the synergistic benefits between Kerry and Niacet's complementary technologies and how these combined technologies can be taken into multiple end-use markets. Marguerite will share the financial profile and more details on the transaction. Now turning to slide four and an overview of Niacet.
Niacet is a global leader in technologies for preservation. It's number one in bakery with a significant market share. Within meat and plant-based food, it's a leader in cost-effective, low-sodium preservation. It's a global leader in high-grade acetate for the pharma market, which is also an exciting end-use market from a Kerry perspective. An important differentiator of note for Niacet is its proprietary know-how and trade secrets and how they combine dehydration and granulation process technologies to make high-purity, cost-effective, easy-to-use products in different applications. In terms of the financials, the business is expected to have revenues of approximately $220 million in 2021, which breaks down approximately 80/20 between food and pharma. You can see the geographic split on the slide there. I would note also that there is a meaningful scale in developing markets in the zone of 20%.
On slide five, Niacet's business profile and capabilities are shown across its end-use markets, its technology families, and primary brands. Under the Provian brand, Niacet delivers cost-effective crystallized product technologies that increase food safety and shelf life in a free-flowing, easy- to- transport, and easy- to- use format. It's a number one player in propionates with an unrivaled scale, their capability in high-purity acetate has made Niacet the leader in the pharma market across all geographies and quality metrics. These acetates are used for various functions across insulin solutions, dialysis solutions, in certain vitamin applications, and other health products. Moving on to how Niacet fits into our strategy on slide six. We've shared a version of this slide with you in the past, and it gives you a view of our systematic approach to executing against our food protection and preservation strategy.
Kerry's early foundations in food protection and preservation, as you can see there from the bottom of the slide, were established with the acquisition of Quest Food Ingredients. In the past four to five years, we've made several organic innovation investments, capital investments, and a number of acquisition investments to build both depth and breadth. The Niacet acquisition marks another key step on our food protection and preservation journey. Kerry's core preservation technologies include fermentation expertise, plant extracts, and functional vinegars. Where Niacet also enhances our position as well as expanding our position into conventional preservation. Keeping food safe over a long shelf life is a complex and multifaceted challenge, and there's no silver bullet, and it's never as simple as just adding or switching an ingredient. Each technology here has a unique mechanism of action.
When used either individually or in combination, they can offer protection across multiple applications, across complex and lengthy supply chains, as well as across diverse environmental conditions. Now moving on to the market on the next slide, which is seeing significant consumer-driven demand. A statistic that you all know is that 30% of all food produced is wasted. If it was a country, it would be the third- highest emitter of greenhouse gases. 700 million people get sick every year by consuming unsafe food products. Recently, we did some Kerry research, and it highlighted that 60% of our consumers are even more concerned about food safety since the onset of COVID-19. Substantially has become a more important factor when consumers are choosing food products. Our goal here at Kerry, as we think about this market, is to deliver against three dimensions.
Firstly, to maximize food safety. Secondly, to minimize food waste. Thirdly, to reduce the overall environmental impact. This is a significant opportunity with our target market size at approximately EUR 1.8 billion and growing at mid-single-digit level. This market is made up of both clean label and conventional preservation. You can see from the footnote the areas that we've excluded and the areas that we won't be playing in. You will also notice the intersection between clean label and conventional preservation. This is something we're seeing in particular in developing markets, where the complexity and the length of the supply chain can require combination solutions. Before I hand it over to Albert, I just wanted to share with you how this acquisition of Niacet will extend and accelerate Kerry's sustainable nutrition impact on slide eight.
This acquisition enhances our nutrition impact in food safety and security, as well as clean label. The area of food protection and preservation will become increasingly important from environmental and social sustainability perspective, as our industry strives to deliver a meaningful climate impact through reduced uses of resources, combined with improved social impact by reaching more people with food that stays fresh and safe for longer. I'll now hand you over to Albert McQuaid to talk through a few examples of the synergies that we can achieve through combining Kerry's capability and Niacet's capability in the whole space of preservation and food safety.
Thank you, Edmond, and good morning. I'm going to share some examples where we can really see Kerry and Niacet's combined capabilities coming to life. Here on slide nine, the first example is the rapidly growing plant-based meat and dairy sector. Kerry's vinegar technology, fermentation technology, and application expertise leverage and complement Niacet's unique proficiencies in drying and granulation process technology. These come together to deliver a more cost-effective and nutritionally adapted solution for the rapidly growing sector. We can deliver low-sodium, improved texture, extra shelf life, better cost in use, and more sustainable solutions for these growing categories. We'll move to slide 10. Meat is a key growth opportunity for the combined Kerry and Niacet technology offering. Kerry is the global co-creation leader for Taste & Nutrition solutions for the meat industry. Niacet has the most cost-effective, low-sodium dehydrated technology for meat preservation and shelf life.
Together, we can address the global need to reduce food waste in meat. We deliver food safety in the most cost-effective and sustainable way while not compromising on taste or nutrition. We enable and accelerate our customers' commitment to achieve zero waste, in what is a significant part of the overall environmental impact of the food industry. We go to slide 11. This example is about food waste reduction in bakery, where Niacet is the global leader in preservation solutions. Kerry have an extensive range of technology offerings into bakery for taste, texture, and shelf life, leveraging clean label solutions. The combination will make Kerry the partner of choice for reducing food waste in the bakery sector and ensuring optimal freshness for longer through conventional, clean label, and combination solutions aligned to customer and regulatory demands by region.
Together, we will have a really meaningful impact on reducing the global volume of bread that goes to waste each day, improving the nutritional reach of our planet's resources. I'll now hand over to Marguerite to bring you through the financial profile.
Thanks, Albert, and good morning, everyone. If you now turn to slide 12, we've outlined the key transaction details and the highly attractive financial profile of Niacet.
Beginning with the enterprise value of EUR 853 million, this represents a 2021 EV to EBITDA multiple of 15.4x excluding synergies. The acquisition is being made on a cash-free, debt-free basis subject to customary closing adjustments. Niacet is expected to achieve annualized pro forma revenue of $220 million and pro forma EBITDA of $66 million in the financial year 2021. This represents a strong EBITDA margin of circa 30%, which will enhance our Kerry margins by circa 30 basis points - 40 basis points. The complementary nature of Niacet's capabilities will enhance Kerry's food protection and preservation strategy to serve a broader market. The resulting revenue synergies are expected to enable the Niacet business to significantly outperform the market and deliver at least mid to high single-digit volume growth.
The combination of this growth and margin enhancement means the acquisition is expected to be EPS accretive of circa 5%-6% on an annualized basis. On funding, the transaction will be funded by a combination of existing liquidity and a dedicated bridge facility. The bridge facility will be repaid out of proceeds from the sale of our Consumer Foods' Meats and Meals business, which we just recently announced. Our balance sheet remains very strong, and the net effect of these two transactions on Kerry's net debt to EBITDA ratio will be minimal. Finally, the transaction is expected to close by the end of the third quarter of 2021, subject to customary closing conditions and regulatory approvals, and we look forward to updating you more as we progress the completion process.
In closing, I would say this is a very strong strategic fit in terms of Kerry's food protection and preservation strategy with complementary technologies and markets. It has a highly attractive financial profile, and it will extend and accelerate Kerry's sustainable nutrition impact. Thank you for listening, and we now welcome your questions. With that, I will hand you over to the operator.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We'll take our first question from Graham Hunt from Morgan Stanley. Your line is open. Please go ahead.
Good morning, everybody. Thanks for the questions. Maybe just two from me. I wondered if you could just add a little bit of color onto the synergy opportunities that you talked a little bit about there, Marguerite, in terms of both revenues and if there's anything as well on the cost side for this acquisition. Further to that point, I just wondered, as you said, with the announced disposal of the meals business last week, do you have a sense of where you expect returns to land by the end of 2021 and what the trajectory of that return metric looks like over the next couple of years?
Good morning, Graham, thanks for the question. I'll kick off here and I'll let Marguerite add some more color at the end. Just firstly on the synergies, and this transaction is all about growth synergies. Just to size those synergies first, and we touched on it in the presentation. This market is growing in the zone of mid-single digit, and we see our revenue synergies driving 3-4 percentage points of growth above that level. In terms of where those synergies are going to come from, I would refer you back to the presentation, but the first point here is clean label, cost-effective, low-sodium preservation solutions for meat and plant-based meat and cheese will be the first area.
Second, the ability to meet the needs of both the premium end of the bakery market with clean label preservation and the value end of the market with more conventional preservation solutions. Third point is in developing markets, we see the opportunity to extend days of shelf life through combining both approaches, both conventional and the clean label together into single solutions. Fourth point here on sales synergies is on the pharma side. While there will be a longer sales cycle there, we do see this enhancing and broadening, and deepening our relationships with customers in the pharma market. Anything you want to add to that, Marguerite?
Yeah. Graham, just on your returns question, the overall impact of the two transactions will be slightly dilutive on returns.
I would say, specifically in relation to the Niacet acquisition, it's a very strategic acquisition with a strong growth and strong margin profile.
Thanks very much.
We'll take our next question from James Targett from Berenberg. Your line is open. Please go ahead.
Hi, good morning, everyone. Yeah, a couple from me. Just to clarify, can you talk about how much the portfolio of Niacet is used for clean label applications versus conventional applications? Just a question really on how we should think about the M&A pipeline going forward. This is obviously a very large deal relative to your recent ones, obviously, you talked about the M&A pipeline being strong, following this deal, what's the sort of outlook for the next 18 months maybe? If I can just squeeze in a third one, just take the opportunity to ask about the remaining dairy business in consumer foods and the Taste & Nutrition segment as well. What are your plans with that now? Thank you.
Thanks, James. I'll take those questions. Maybe to start on your last question first, and I think it'd be important maybe to frame it in the context of the transaction last week as well. We've been clear for several years that our strategic focus from a capital allocation perspective is our Taste & Nutrition business, and the private label retail business in the U.K. was not an area for capital allocation for Kerry. Until such time as the Brexit perspective was clear at the end of December, we were not in a position really to maximize the value for our shareholders. What we did was we really challenged ourselves around the consumer foods business and looked at various options to maximize value for shareholders. We looked at the dairy business on its own, the dairy business in combination with the dairy processing assets.
We looked at the meat business on its own. We looked at meals on its own. We looked at merging the business in its entirety with other retailers in the market. We looked at maybe doing a transaction on private label on its own. We looked at separating out brands. We also looked at it from a geographic perspective, running a transaction for Ireland and the U.K. with a combination of portfolios. We have concluded that portfolio review for now. I would say that there was an exhaustive review completed, and what we ended up with is what we believe was the optimal way to drive the best shareholder value right now for this time. In terms of the portfolio coming to with Niacet.
It's primarily conventional in terms of conventional preservation in terms of scale, with the clean label making up a smaller amount. Clearly the clean label element of the business is growing quickly. In the conventional preservation area, what we've seen is that the real value in preservation and for Kerry to be in the preservation space is to have the complete portfolio and a complete capability and to be able to work with customers across the range and the entire range of their products. What we were noticing, let's say in bakery alone, was our approach was primarily, sorry, exclusively on the clean label elements of that market. While it's growing fast, it's niche in terms of its premium, the premium position that it takes within the entire bakery market.
We felt that it was important for us to be able to play both at the premium end and at the value end of the bakery market. In terms of clean label, that has been a recent innovation investment for the team at Niacet, over the last maybe three, four, five years, and is very complementary to what we're doing in our clean label journey, especially on the meat side as well. A uniqueness that they have brought there is really the low-sodium type preservation solutions that they have in their portfolio. Lastly, on the M&A pipeline, I would say, the M&A pipeline continues to be quite strong.
I would say that, like we said maybe towards the end of 2020, we did flag the fact that in times of crisis, whether it was the financial crisis, whether it was major regulatory changes like we saw in the U.S. maybe four or five years ago.
Big changes like that in our industry typically creates an environment that more transactions come to the market. We continue to be quite busy in terms of evaluating various opportunities and maybe one small, maybe just evolution in terms of how we evaluate these transactions for on top of strategy, on top of financial, is also the sustainability impact that these transactions can have on Kerry and our customers. We see this transaction today being accretive from a sustainability perspective as well.
Thanks, Edmond.
We'll take our next question from Heidi Vesterinen from Exane BNP Paribas. Your line is open. Please go ahead.
Thanks. I have a few. Could you talk about the financial history of the business, please, perhaps in terms of volume growth, margin profile, and also its cash generation, maybe going back a couple of years. The second one, who are Niacet's competitors, please? Lastly, could you talk a little bit about channel exposure in food? Do they have exposure to food service, for example? Thank you.
Thanks, Heidi, and good morning. I might take the second two questions first and pass the financial question back to Marguerite. Firstly, in terms of, let's say, competitors. On the meat end-use market first, Kerry would have been a competitor of Niacet, as would, let's say, a Corbion would be a competitor of Niacet in the meat space. Albeit that, let's say all three companies have a slightly different approach. We would compete in the overall space on a meat end-use market first. In terms of the bakery end-use market, from a Kerry perspective, we were competing with Niacet in terms of, let's say, our clean label technologies into that space, while Niacet was primarily coming with a conventional approach. Albeit they have an innovation pipeline on clean label preservation for bakery as well, albeit it's less mature in terms of their overall portfolio.
Beyond that, there are a number of smaller players. What I would say, though, is that as we look at the total market as we defined it and I outlined the scale of the market and what we've excluded from that market and included in that market in the presentation, it's sized at EUR 1.8 billion. It's growing at mid-single digits and in that zone. From a market share perspective, both combining Niacet and Kerry, we would be in the 20%+ zone from an overall market share perspective. In terms of channel exposure, I would say that the vast majority of their sales goes to the retail market. They would not have, let's say, fantastic visibility of, let's say, exactly how much goes into food service. Our view right now is that it's quite limited.
That's something we do see as an opportunity over time to help us, I suppose, bolster our own capability into food service. That's kind of, let's say, the summary of their position from a channel perspective.
Perhaps just on the historical financials, the business has been growing well over the last number of years in line with the market in the zone of mid-single-digit growth. It's also, over that period, had a strong margin profile and good cash conversion profile.
Thank you.
We'll take our next question from Ryan Tomkins from Jefferies. Your line is open. Please go ahead.
Yeah, thank you. Good morning, all. Just a quick one from me. I appreciate we've covered quite a lot. If I think about preservation in the portfolio, it's an area that I think you've talked about before and that I would have assumed was quite strong for you. I'm just wondering kind of what attracted you to make an acquisition in an area of relative strength for you rather than maybe building up the portfolio elsewhere? Or is that not a fair way to look at it? Thank you.
Thanks, Ryan, and good morning. You're absolutely right. We did give you a peek under the hood of around how we were thinking about the overall preservation market and food protection market when we, back, I believe at the half- year results in 2020. For us, what's important is that, let's say we are the go-to partner for our customers.
In preservation. We want to be a holistic partner for customers in that market. What we felt was that in certain end-use markets, we needed to be both in conventional systems as well as clean label systems. In developing markets, within certain end-use markets in developing markets, we saw that we required both a clean label approach and a conventional approach. To combine those to really be able to accelerate our growth in developing markets because of the complexity of the supply chains and the length of the supply chains that we were seeing in developing markets. I'd say, in terms of our strategy, it is, I would say, center of the plate from a strategic perspective. We are striving for a leadership position here. I think we are clear leaders now in preservation.
The breadth of end-use markets that we work across, I would say is another strength, and I would say is a clear differentiator versus anybody else in the market. For us, center of plate from a strategic perspective and in a strong growing market and best placed, I would say, in the industry to convert those opportunities into growth.
Very clear. Thank you.
We'll take our next question from Cathal Kenny from Davy Research. Your line is open. Please go ahead.
Good morning, all, and thanks for taking the question. Just one from my side. Just if we take the consumer foods business, the power disposal, and this morning's announcement, just want to understand maybe from a margin and a volume growth perspective, the overall accretion dilution, or how should we think of it at group level. Thanks.
Thanks, Cathal. Post the completion of the Niacet acquisition and the recently announced Consumer Foods' Meats and Meals disposal, we will have enhanced group volume growth of circa 20 basis points-30 basis points. In relation to margin, we will have enhanced trading margin of circa 70 basis points-80 basis points going forward. This is obviously a significant expansion of the group's margin profile.
Marguerite, any comment on cash conversion? Any change?
On cash conversion, as I said, Niacet, it's a very good cash business. We will be investing in the early years to support our growth plans. From a group perspective, we're not calling out any change to our overall expectations on cash conversion, taking into consideration both transactions.
That's clear. Thank you.
We'll take our next question from John Ennis from Goldman Sachs. Your line is open. Please go ahead.
Hello. Good morning, everyone. Just a couple of quick follow-ups from me. The first is on the revenue split. You highlighted that food accounts for 80% of revenues. Can you just give a rough breakdown between bakery versus meat versus plant-based? Then my second is on margins. Is there a big difference between the margin profile of the pharma versus the food parts of the portfolio or a big difference by region that we should be aware of? Thank you.
Thanks, John. I'll take those two questions. We don't see any difference from a margin perspective, I would say, across end-use markets. From a technology perspective, when we look at the business through the lens of technology, those technologies going into each end-use market are more or less the same from a margin perspective. From a geographic perspective, we wouldn't be calling out any difference either. In terms of the split out between end-use market, the food end-use market, it's primarily bakery, followed by meat, and plant-based would be quite small right now. That said, it would be in the combination of Kerry and Niacet that we would see the bigger opportunity in plant-based as we go forward.
Understood. Thank you very much.
We'll take our next question from Jason Molins from Goodbody. Your line is open. Please go ahead.
Hi, good morning. A number of questions that have been answered, but maybe just a couple of follow-ups. Firstly, in terms of the cash requirement, can you maybe talk about the existing facilities, how well you see them that they've been invested or you mentioned having to invest behind the combined business, so maybe just elaborate a bit more on what you're expecting there. In terms of the potential overlap, is there any real overlap from a customer perspective?
At the moment. Thanks.
Thanks, Jason. I'll take those questions. The last point on customer overlap first. I believe that the company brings about 300 customers to Kerry. I'm sure within that 300 customers there are new customers. I would imagine there's quite a bit of overlap from a customer perspective, albeit the types of technologies and the solutions we're providing into customers would be different. New customers, an overlap as well. In terms of the first part of your question, these facilities are heavily invested, highly automated, but it might be worthwhile just to share with you how we're thinking about this business from an integration standpoint. I think that'll give you some visibility on some of the areas of investment that we're thinking about. Three areas I would call out.
Firstly, in the technology integration, in terms of achieving the synergistic benefits through combining both elements of the portfolio, whether that's on the labeled or the conventional side. There'll be some investments there from, I would say, probably more operating standpoint. Secondly, on the manufacturing integration side, we do want to maximize the opportunity to leverage the proprietary process technology that Niacet has developed. The third area is on the commercial integration side. We'll be plugging Niacet into Kerry's go-to-market structure globally. They'll be some of the earlier areas of focus, and there will be some investment around that.
Thanks.
We'll take our next question from Maria Munoz from Santander. Your line is open. Please go ahead.
Hi. Good morning. I was just wondering if you could, taking both transactions together, so the one that you announced last week and the one that you have announced today, would it be from your initial thoughts, the EPS dilution for the year, for this year on the, I'd say FY 2021, and if possible, for FY 2022, if any at all. Thanks.
Thank you for the question. On a full year basis, on an annual basis, just in relation to the EPS impact, the sales of the consumer foods meat and meals business to circa 9%-10% dilutive and Niacet to circa 5%-6% accretive. If one looks at it from a final quarter perspective, and obviously it's heavily impacted by the timing, but if one assumes that both completes at the end of Q3, the sale of the consumer foods meat and meals business will result in an EPS dilution of circa 3% in the quarter, while the Niacet acquisition will be EPS accretive of circa 1% in the quarter, just reflecting bridge finance costs in the final quarter.
That'll mean altogether it's around 2% dilution in Q4?
Very much depending. Yes, broadly in line, but very much dependent on the timing of the completion.
Okay.
I think I would say-
Did you for-
I would say Sorry, Maria, just even just to give it an extra angle, and that is in terms of our foods, it is kind of the 9%-10% . Our foods business, actually, the meat and meals part of the foods business, it does generate higher profits in the second half of the year. In the last quarter, it is a higher weighting of an impact versus the annualized impact. When we're talking to kind of the quarter, Maria, there is two moving parts which mean it's not reflective of the annualized impacts that Marguerite called out.
That was what I was going to ask. You have mentioned, if I've correctly understood what you said, that the potential dilution in Q4 2021 would be around 2%, depending on obviously when these transactions are closed, but assuming that they are closed sometime during Q3. I was wondering if we go for one whole year, so let's say year 2022, what would be overall the potential dilution from, or accretion from both transactions?
Just in the context of the EPS impact.
The annualized impact that I referenced is in relation to FY 2021. We've been as transparent as possible in relation to the impact in 2021, assuming that the transaction closes in the final quarter. Obviously, in relation to FY 2022, we'll update in more detail at the half year.
Okay, thanks.
We will take our next question from Alex Sloane from Barclays. Your line is open. Please go ahead.
Yeah. Hi. Morning, all. Just two follow-ups from me. Just the first one, within the mid- to high- single-digit growth you're expecting from the Niacet asset, are there any areas of the conventional preservatives that the company is playing in that are or might come under pressure as consumers and customers seek cleaner label solutions, as we've seen in some other preservative markets like sorbates and benzoates? Appreciate your not playing in those areas. Just the second one, just to follow up to Marguerite, just on the cash conversion. Good to hear no change there net of these two transactions. Just to clarify, that means you're still targeting and on course in 2021 for cash conversion above 80%? Thanks.
Yeah. Good morning, Alex. Yes, just on the cash conversion, to reconfirm from a group perspective, we're not calling out any change to our overall expectation on conversion. As we indicated before, it is going to be 80% cash conversion.
Alex, I'll take the first part of your question. In terms of the bakery market, let's say where Niacet primarily plays from a conventional perspective, what we're seeing is that there's two parts of bakery, let's say, that are growing. They're at both ends of the spectrum. I would say the first is that the premium end of bakery is growing, and we see that as primarily the opportunity from a clean label perspective. I would say at the value end of the market, the lower end of the market from a cost standpoint, we see the opportunities on the conventional side. There has been a conversion, obviously. I think we're very well positioned to take advantage of the conversion as if and when customers in bakery convert from clean label to Oh, sorry, from conventional to clean label.
Another point I would make, though, is in developing markets. Bakery is a massive market in developing markets. As you can appreciate, baked goods are staples in developing markets. What we're seeing there is firstly, as markets evolve towards more, let's say, processed bread and let's say bread being manufactured at scale, the starting point is conventional. We see opportunities there as markets, let's say, continue to evolve, especially the market continues to evolve in developing markets. The next point I'd make on developing markets is that we're seeing the opportunity to combine both conventional approaches as well as clean label approaches to extend days. From a regulatory perspective, there is only a certain level of preservative that you can put into certain products.
An opportunity to extend overall days because of the length of the supply chain in developing markets and because of the complexity of the supply chain in developing markets, there is an opportunity to combine both solutions, and we see that as a bigger opportunity. Overall, look, we're really excited about this transaction. We feel that we know this business well, we know the market well, and we feel that the synergy perspective that we have on this business and the combined business is something that is achievable well out into the future.
Thanks.
It appears there are no further questions at this time. This will conclude today's call. Thank you.