GREENCORE ANNOUNCES A FURTHER PLATFORM ACQUISITION IN THE US
TO SUPPORT NEW BUSINESS WIN IN FOOD TO GO
Greencore today announces that it has acquired H.C. Schau & Son, Inc. ("Schau"), a fresh food manufacturer with facilities in Chicago, Illinois and Jacksonville, Florida (the "Acquisition"). The Acquisition will form a critical part of the supply network for a significant new multi-regional contract gain in Food to Go with a national food service chain.
Schau is a producer of fresh sandwiches and sushi as well as fresh entrees and other ready to eat items, sold through both the convenience store and grocery retail channels. It has an established modern facility in Chicago and a new high quality start-up facility in Jacksonville. For the year ended December 2011, it had revenues of $32m (£20.5m).
The Acquisition provides the capability and capacity to drive growth in the US, both with existing customers and with the recent new business win. It will build on the acquisition of Marketfare Foods in April 2012 by adding scale with 7-Eleven, to whom Schau is a long-term supplier in the Chicago region. In addition, Greencore has put in place a multi-year partnership with the new customer to supply its stores with approximately $50m of Food to Go products on the east coast and in the mid-west from four of Greencore's facilities. The delivery of this new business will be phased in between September 2012 and March 2013.
Under the terms of the Acquisition, Greencore will pay upfront cash consideration of $13.0m (£8.3m) plus deferred cash consideration of $4.3m (£2.8m). An additional cash amount of up to $2.0m (£1.3m) will be payable dependent on certain performance conditions. The transaction will be funded from existing debt facilities and will have a minimal impact on the Group's leverage. It is expected to be modestly earnings accretive from the first year of ownership. Integration and transaction expenses are estimated at $2.5m (£1.6m) and will be treated as an exceptional item.
Commenting on the news, Patrick Coveney, CEO of Greencore, said: "Schau, along with Marketfare, will allow us to take a strong step forward in executing the next stage of our US strategy. Greencore now has a Food to Go platform in the US that will not only enable us to better serve our existing customers, but also to support what is a significant and exciting new business opportunity."
For further information:
Chief Financial Officer
Tel: + 353 1 605 1018
Rob Greening / Lisa Kavanagh
Tel: + 44 207 250 1446
Notes to Editors
- 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) Greencore will publish its interim management statement on 31 July 2012
3) US dollar values have been converted to GBP using an exchange rate of 1.56
4) Historical financial information for H.C. Schau & Son, Inc. is extracted from unaudited management accounts
5) 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.
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