ACQUISITION OF US BUSINESS
Greencore Group plc today announces the agreement to acquire Marketfare Foods, LLC, for a consideration of $36.0 million (£22.6m).
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.”