If company desires are met it will add to the mergers and acquisitions frenzy that is occurring in the food and drink sector at the moment. Company executive officer John Tolmie said he was seeking outside revenue to boost sales of liquorice outside Australia. Sales of the product have become an increasingly larger part of the company's revenue, growing to 12 per cent of total revenue in just over 4 years. "Darrell Lea licorice is now sold in over 10,000 outlets around the world, largely in the key markets of the US, UK and Canada," he said. "Foreign sweet tooths have developed a taste for Darrell Lea licorice because its high water content and natural flavourings make it easier to eat and tastier than traditional hard licorice products such as straps and allsorts." However the firm will need considerable capital in order to grow in a "competitive environment," Tolmie said. According to the website news.com, an advisory firm will soon be appointed to assess potential private equity investors interested in taking a stake in the company. The company requires at least $25 million worth of investment over the next two years to fund an overhaul of manufacturing and sales that will include improving efficiency and increasing brand marketing. "These are exciting times, as what we are actually doing overseas is creating a soft eating niche within the global liquorice market with our product," said Tolmie. The Lea family are willing to consider sell down the bulk of its investments if necessary, he added. Private equity companies have increasingly been turning their attention to the food sector as an area of lucrative growth through mergers and acquisition. Shareholder activist Nelson Peltz has recently bought major stakes in Cadbury, Heinz and Kraft, while Warren Buffett, CEO of Berkshire Hathaway, is also rumoured to be on the lookout for food and beverage companies to turn into cash cows.
In the US merger and acquisition activity has grown from $6.76bn (€4.95bn) worth of deals in 2003 to $16.4bn (€12bn) last year. In the first half of this year $11.91bn (€8.73) worth of M&A activity has already occurred.