Newprinces' Strategic Expansion in Italy: A High-Conviction Buy Opportunity Amid Retail and Consumer Goods Consolidation

In 2025, NewPrinces Group has emerged as a standout player in Europe's food and beverage sector, leveraging a dual strategy of strategic acquisitions and regulatory tailwinds to position itself for sustained growth. The recent €120 million acquisition of Kraft Heinz's Italian infant and specialty food business—featuring iconic brands like Plasmon and a state-of-the-art production facility in Latina—has cemented its dominance in high-margin, premium segments. For investors, this move represents not just a tactical win but a masterclass in capitalizing on sector-specific synergies and Italian regulatory incentives to unlock value.

Strategic Acquisitions: Synergies in Scale and Brand Power

NewPrinces' acquisition of the Latina facility is a textbook example of vertical integration. The plant, which produces 1.8 billion biscuits annually for the Plasmon brand, integrates seamlessly with the company's existing European supply chain. This not only reduces per-unit production costs but also enhances control over quality and distribution. The 300-employee workforce, already aligned with Plasmon's legacy, minimizes integration risks and ensures continuity in brand equity.

Complementing this, NewPrinces' purchase of Diageo's Italian RTD operations in May 2025 adds a 350-worker factory specializing in ready-to-drink alcoholic and non-alcoholic beverages. This diversifies the company's portfolio into a fast-growing category, where premiumization trends are accelerating. By consolidating these assets, NewPrinces is creating a cross-functional ecosystem where procurement, logistics, and R&D can be optimized across brands like Plasmon, Nipiol, and Dieterba.

Regulatory Tailwinds: Tax Incentives and Reshoring Bonuses

Italy's 2025 regulatory framework provides a fertile ground for NewPrinces' expansion. The reshoring exemption under Legislative Decree 209/2023 offers a 50% reduction in IRES and IRAP taxes for income from activities repatriated to Italy. This is particularly relevant for NewPrinces, which is repositioning the Latina facility as a regional hub. The tax break applies for six years, providing a long-term cushion to reinvest savings into automation and workforce training.

Additionally, the 2025 Budget Law introduces a 20% tax credit for investments in “4.0” technologies (e.g., AI-driven production systems) and a 10% credit for intangible assets like cloud computing. For a company acquiring a high-output facility, these incentives directly reduce capital expenditures. The Special Economic Zones (SEZ) in Southern Italy further amplify this benefit, offering tax credits of up to 40% for investments in regions like Latina, where NewPrinces' facility is located.

The IRES Premiale—a 4% tax rate reduction for companies reinvesting profits in 4.0/5.0 assets—aligns with NewPrinces' growth ambitions. By allocating 30% of 2024 profits to automation and digitalization, the company can further compress costs while boosting output.

Valuation Potential: Undervalued Assets and EBITDA Expansion

NewPrinces' valuation metrics are compelling. The company's net debt/EBITDA ratio of 1.95x (as of December 2024) is conservative, allowing room for debt-free acquisitions. The Kraft Heinz deal, valued at a 7x EBITDA multiple (vs. NewPrinces' own 6x), is accretive and immediately boosts revenue streams. Analysts project EBITDA to rise to €200 million by 2026, reducing the EV/EBITDA ratio to 5x—a discount to peers like Nestlé and Danone.

The acquisition also accelerates NewPrinces' path to its €3 billion food and drinks revenue target by 2026, with a long-term goal of €5 billion by 2030. With a 6.4% EBITDA margin already achieved in FY2024, margin expansion is likely as scale and automation drive efficiency.

Investment Thesis: A Buy on Conviction

NewPrinces is a rare combination of operational discipline and strategic foresight. The company's ability to integrate acquisitions swiftly—evidenced by the 2024 Princes Group merger—reduces execution risk. Regulatory tailwinds further enhance ROI, while the focus on premium, health-conscious segments (e.g., infant nutrition, RTD beverages) taps into secular growth trends.

For investors, the key risks include regulatory delays in the acquisition's closure and potential inflationary pressures in raw materials. However, the tax incentives and SEZ benefits mitigate these concerns. The company's exploration of an IPO on the London Stock Exchange also signals confidence in its valuation potential, potentially unlocking liquidity for shareholders.

Bottom Line: NewPrinces offers a high-conviction opportunity for investors seeking exposure to a European food and beverage company with a clear growth trajectory, regulatory tailwinds, and a disciplined management team. With shares trading at a discount to intrinsic value, the stock is poised for significant appreciation as synergies materialize and the company's 2030 revenue targets come into view.