(Alliance News) - Premier Foods PLC on Monday announced that it acquired the FUEL10K brand, as part of efforts to expand its portfolio of breakfast products.
The St Albans, Hertfordshire-based food manufacturer, which creates products for various brands including Ambrosia, Bisto, Mr Kipling and Oxo, acquired 100% of the company for GBP34.0 million.
Premier Foods will fund the initial GBP29.6 million consideration through its cash reserves, and will pay deferred consideration of at least GBP4.0 million in financial 2026 or 2027. Amounts will depend on "certain growth targets".
"The acquisition of FUEL10K follows on from our successful integration of The Spice Tailor, where we have increased revenue and profit through the application of our branded growth model," commented Chief Executive Officer Alex Whitehouse. "FUEL10K provides us with an ideal platform to accelerate our expansion into the Breakfast category, building on our recent successful launch of Ambrosia porridge pots."
Premier Foods said FUEL10K's "on-trend proposition" and protein-enriched breakfast offering "attracts a predominantly young consumer demographic." Its portfolio consists of granola, oats and drinks.
The company said its new brand showed a "track record of strong double-digit revenue growth" throughout the last three years, and it expects the purchase to be earnings accretive in its first full year.
Whitehouse said: "Possessing a differentiated category position...we expect to deliver significant further profitable growth of FUEL10K through the deployment of our successful branded growth model."
Premier Foods shares were up 0.7% at 114.00 pence in London on Monday morning.
By Emma Curzon, Alliance News reporter
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Premier Foods (PFD)