ACQUISITION OF US BUSINESS

RNS Number : 5037B

Greencore Group PLC

17 April 2012

 

17 April 2012

GREENCORE GROUP PLC - ACQUISITION OF US BUSINESS

Greencore Group plc ("Greencore") today announces the agreement to acquire Marketfare Foods, LLC, ("Marketfare") for a consideration of $36.0 million (£22.6m) ("the Acquisition").

Marketfare is a leading manufacturer of food to go products for convenience and small stores in the US.  Its principal customer is 7-Eleven, which it has partnered for over 20 years, and it is the largest single supplier of Fresh to Go and 7-Smart store-branded sandwiches, servicing over 1100 7-Eleven stores in the Mid-Atlantic region.   In addition, it is an exclusive manufacturer of Casa Buena Cheese and Chili sauces for the entire 7-Eleven chain in the US and Canada.

For the year ended 27 January 2012, revenue for Marketfare was $65 million (£40.9m) and EBITDA was $5.7 million (£3.6m).  Gross assets at 27 January 2012 were $20.1 million (£12.6m).  The consideration of $36.0 million (£22.6m) is on a debt-free, cash-free basis with a normalised level of working capital.  The transaction will be funded from existing debt facilities and is expected to complete on 18 April.  It is expected to be modestly earnings accretive from the first financial year of ownership.  Integration and transaction expenses are estimated at $3.5m (£2.2m) and will be treated as an exceptional item.

Commenting on the Acquisition, Patrick Coveney, Chief Executive Officer of Greencore, said:  "The acquisition of Marketfare represents an excellent opportunity for us to further develop our food to go business in the US, building on the successful acquisition of On a Roll in December 2010.  It builds additional scale with 7-Eleven, provides new competencies for us in the fast growing food to go category and extends our geographic footprint principally along the Eastern seaboard.  The new product capability and geographic expansion provide the opportunity to expand further with our existing customers; the Acquisition represents the next step in our strategy to build a business of real scale in the US."

Conference Call

A conference call for investors and analysts will be held at 2.30pm BST today.  Dial in details are below and a replay facility will be available afterwards at www.greencore.com.

UK/International         [phone]

Ireland                         [phone]        
Access code:               3109147#

For further information:

Patrick Coveney	Chief Executive Officer	Tel: [phone]
Alan Williams	Chief Financial Officer	Tel: + 353 1 605 1018
Greg Lawless / Lisa Kavanagh	Powerscourt	Tel: + 44 207 250 1446

NOTES TO EDITORS

1) Greencore:

-     A leading international producer of convenience food

-     Strong market positions in the UK convenience food market across sandwiches,  chilled prepared meals, chilled soups and sauces, ambient sauces and pickles, cakes, desserts and Yorkshire puddings

-     Extending presence outside the UK with an emerging convenience food business in the US

2) Marketfare:

-     The largest single supplier of the 7-Eleven Fresh to Go and 7-Smart store-branded sandwiches

-     Services over 1200 7-Eleven stores with sandwiches and other products in the Mid-Atlantic and Salt Lake City areas

-     Exclusive manufacturer of Casa Buena Cheese and Chili sauces for the entire 7-Eleven chain in the US and Canada

-     In addition to fresh sandwiches and sauces, the product range covers frozen snack products such as frozen breakfast sandwiches and meat patties

-     Operating facilities in Fredericksburg, Virginia and Salt Lake City, Utah 

-     The company was previously owned by Swander Pace Capital, Silver Brands Partners and New York Life Capital Partners

3)   Greencore will publish its interim results announcement on 22 May 2012 and will provide further detail on its US strategy

4)   US dollar values have been converted to GBP using an exchange rate of 1.59

5)   Historical financial information for Marketfare is extracted from unaudited management accounts

6)   This announcement contains certain forward looking statements with respect to the financial conditions, results of operations and businesses of the Group. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements. Nothing in this announcement should be construed as a profit forecast.  

 

END

 

 

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