Irish chocolate manufacturer Lily O’Brien’s has agreed to be acquired by Colian Holdings, a Polish food company, for €40 million.

The debt-free acquisition from Lily O’Brien’s existing shareholders – the Carlyle Cardinal Ireland (CCI) fund and members of the Lily O’Brien’s management team – is expected to be completed in January.

Founded in 1992 by Mary Ann O’Brien in the kitchen of her home, Lily O’Brien’s employs 120 people at its Newbridge, Co Kildare, plant and generated revenue of more than €30 million in 2016. The company is named after Ms O’Brien’s daughter Lily.

Colian Holdings, which exports biscuits, chocolates, jellies and seasoning products from Poland and is also active in the beverage sector, employs about 2,000 people. The company’s shares are listed on the Warsaw Stock Exchange, while it is also the owner of the British chocolate brand Elizabeth Shaw.

Lily O’Brien’s will continue to be run by the existing management team led by chief executive Eoin Donnelly, while Ms O’Brien will remain as a director and consultant to the company. Colian intends to “continue to develop its Newbridge operations”, CCI said in a statement.

Shared vision

“We selected Colian as the new owner for the business given our shared vision of growing our brand globally,” said Mr Donnelly.

“Colian exports to over 60 countries worldwide, providing us with access to potential new markets, and their commitment to new product development and innovation is very exciting for employees and the company.”

CCI, an Ireland-focused private equity fund set up by the Cardinal Capital Group and the Carlyle Group, paid about €15 million for a majority shareholding in Lily O’Brien’s in January 2014, investing alongside O’Brien, Donnelly and other members of the management team. Ms O’Brien kept 14.75 per cent of the business.

Since 2013, both the total turnover and the global export revenues of Lily O’Brien’s have increased by almost 50 per cent, with the growth underpinned by increased investment in production facilities and new product development.

The company currently exports more than 80 per cent of its products, which include its honeycomb Crispy Hearts and Sticky Toffee chocolates. The brand is sold in more than 15 countries and in the in-flight catering menus of some 20 airlines.

Over the past four years, Carlyle Cardinal Ireland has invested in eight Irish companies, including AA Ireland, Carroll’s and Sam McCauley. This deal will represent its first exit from its portfolio of Irish businesses.

“We look forward to supporting more Irish companies with investment in 2018,” said Cardinal Capital Group founder Nick Corcoran.