UK-based manufacturer of convenience foods Greencore Group plc has completed the acquisition of Freshtime UK Limited, a supplier of food-to-go salads, chilled snacks and prepared produce in Britain. Its products are distributed primarily in the grocery and convenience channels. The £56 million (US$68m) deal marks “an exciting opportunity to enhance Greencore’s products offering,” according to the company.
“Freshtime is a business and a customer set that we know very well and it provides us with an exciting opportunity to add further capacity to our manufacturing network and help drive growth and value for shareholders,” says Patrick Coveney, CEO of Greencore.
In the 12 months ended December 2018, Freshtime generated revenues of £66million (US$80 million) and profit before tax of £5.6million (US$6.8m). Gross assets at December 31, 2018, were £22million (US$27 million).
Total consideration for the acquisition comprises an enterprise value of £56 million (US$68 million), cash on the acquired balance sheet and a normalized level of working capital, notes Greencore. This will be funded from existing debt facilities and the Group expects to remain within its medium-term leverage range following the acquisition.
Snacking expansion
The acquisition of Freshtime also advances Greencore’s growth strategy in snacking and Freshtime’s strong customer base is highly complementary to the Group’s existing portfolio, says Greencore.
Freshtime’s production facility is well invested, with an established local supply chain and capacity for future growth. The Greencore Group already distributes a large proportion of Freshtime’s products through its Direct to Store network, reflected as revenue from the distribution of third party products.
The transaction is expected to be neutral to earnings in FY19 and modestly accretive in FY20, notes the company.
Greencore has acquired the whole of the issued share capital of The Bay Group Limited, the parent company of Freshtime UK Limited, from John Curran Mills Richmond.
