Introduction
Surprisingly, Nomad Foods (NOMD) doesn’t get a lot of attention here on Seeking Alpha. Perhaps the lack of a dividend makes the stock less appealing, but I have to admit I am quite charmed by the company’s acquisition strategy.
The (frozen) food sector is still very fragmented, and Nomad Foods is playing an important role as a consolidator. It uses its free cash flow to buy smaller competitors which are subsequently fit into Nomad’s brand portfolio and business divisions. This strategy isn’t entirely risk-free as Nomad purchases the companies with cash (which