Tag Archive | "Greencore"

OAL’s autocoding remove human error at Greencore


This yearvent welcomed Caroline Smales, Technical Manager at Greencore Leeds to discuss the advantages to having Autocoding by OAL on site and their future plans.

At the Greencore factory in Leeds, OAL installed an Autocoding system in order to remove human error from the packing line. The system allowed the site to keep track of the 200 different variants of Yorkshire Pudding that are produced and allow additional checks to ensure greater accuracy.

Autocoding from OAL allowed the site to remove all the paperwork from the factory floor and lower the risk of costly product recalls.

“What the system has given us is peace of mind and allowed us to regain customer confidence” Caroline Smales, Technical Manager at Greencore Leeds

In operation, OAL’s Autocoding links to a master database of product profiles, online scanners and printers which give the company complete control over their processes as well as the ability to build and upgrade, which is where the Leeds site see’s itself now. Future plans for the site are to move focus from product quality checks and coding assurance to measuring the overall plant performance by using the data it captures every day with expansion modules from OAL Connected.

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Greencore Makes Bolt-on Acquisition in UK Ready Meals


Greencore Group has acquired International Cuisine, a private label chilled ready meal business, from the Hain Daniels Group in the UK. International Cuisine’s ready meal facility is based in Consett in CountyDurham and the majority of its revenue of approximately £45 million is derived from several existing Greencore ready meal customers.

The acquired facility will also provide additional capacity for Greencore in the ready meals category in the UK, which continues to show strong growth. The gross assets acquired were £16.7 million.

The transaction will be funded from existing debt facilities and will have a minimal impact on Greencore’s leverage, which is anticipated will remain below 3.0 times at end September 2012 on a net debt to EBITDA basis.

Greencore is one of the leading convenience food manufacturers in theUKwith strong market positions across sandwiches, chilled prepared meals, chilled soups and sauces, ambient sauces and pickles, cakes, desserts and Yorkshire puddings. The group has also been extending presence outside the UK with an emerging convenience food business in the US.

The Hain Daniels Group in the UK is part of The Hain Celestial Group, a leading natural and organic products company.

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Greencore Makes Further Platform Acquisition in the US


Greencore has further strengthened its business in the US with the acquisition of  HC Schau & Son, a fresh food manufacturer with facilities in Chicago, Illinois and Jacksonville, Florida. The acquisition, which is worth up to $19 million, 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 $32 million (£20.5 million).

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 $50 million 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 an upfront cash consideration of $13.0 million plus deferred cash consideration of $4.3 million. An additional cash amount of up to $2.0 million 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 Greencore’s leverage. It is expected to be modestly earnings accretive from the first year of ownership. Integration and transaction expenses are estimated at $2.5 million and will be treated as an exceptional item.

Patrick Coveney, chief executive of Greencore, says: “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.”

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Greencore Selling Chilled Desserts Plant to Muller UK


Greencore is disposing of its chilled desserts facility in Minsterley to the Muller Dairy UK for £4.3 million. Under the terms of the disposal, ownership of the facility will transfer to Muller and the co-packing arrangement for Cadbury chilled desserts will terminate.

The disposal is expected to complete at the start of January 2013, by which time the transfer of production of other premium desserts lines and related manufacturing equipment to Greencore’s Evercreech facility will have been completed. This would then conclude the restructuring of the chilled desserts business, which Greencore acquired from Uniq in September 2011.

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Uniq Acquisition Boosts Greencore


Buoyed by the acquisition of Uniq, UK and Irish convenience foods group Greencore has increased revenue by 49.9% to £567.7 million and group operating profit by 36.7% to £31.7 million for the 26 weeks ended 30 March 2012. Revenue from continuing activity rose by 9.3% with the Convenience Foods division ahead by 9.7%. However, group operating margin slipped by 50bps to 5.6%, resulting from the incorporation of Uniq.

“Our business has performed strongly in the first half of 2012. The acquisition of  Uniq last year has reshaped our group and we are on track to deliver all of the targeted integration benefits,” comments Patrick Coveney, chief executive of Greencore.

Greencore has also made further progress in the US with the acquisition of MarketFare Foods. “This acquisition represents the next step in building a business of real scale in theUSand strengthens our position in the food to go/convenience store channel,” he adds.

Patrick Coveney does not expect to see any material improvement in the trading environment in the UK in the second half and has yet to see a material easing in inflationary pressure. “Notwithstanding these pressures, we continue to target good underlying revenue growth and strong growth in adjusted earnings per share,” he says

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Greencore Strengthens US Foods Business


Greencore Group, one of the leading convenience food manufacturers in the UK and Ireland, is strengthening its US business with the acquisition of Marketfare Foods for $36.0 million (£22.6 million). 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 and EBITDA was $5.7 million. Gross assets at 27 January 2012 were $20.1 million. The transaction is being funded from existing debt facilities. It is expected to be modestly earnings accretive from the first financial year of ownership. Integration and transaction expenses are estimated at $3.5 million and will be treated as an exceptional item.

Patrick Coveney, chief executive of Greencore, comments: “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.”

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Greencore Group Seeks UK Stock Market Listing


Greencore, the Dublin-based international convenience food producer, is seeking a listing on the London Stock Exchange. The move reflects the fact that despite its Irish origins Greencore now has the majority of its turnover, operating profits and producing assets derived from or located in the UK. In addition, the majority of the group’s shares is now held by overseas investors. Greencore’s board believes that FTSE UK index inclusion would result in a further increase in UK and international investor awareness of Greencore.

 

In July 2011, Greencore announced the acquisition of Uniq which has further increased the proportion of its activity in theUK. At this time, Greencore also announced its intention to seek FTSE UK Series inclusion. With effect from the close of business on 20th January 2012, Greencore’s ordinary shares will be cancelled on the Irish Stock Exchange’s Main Securities Market.

 

Greencore will retain the Premium Listing of its Ordinary shares on the Official List of the United Kingdom Listing Authority and its Ordinary shares will continue to be traded on the main market for listed securities of the LSE. Greencore has already changed its reporting currency from Euro to Sterling and going forward, dividends will be declared in Sterling.

 

The FTSE Nationality Committee, which considers the qualification of shares for index eligibility, meets on 7th February 2012. The FTSE European/Middle East/Africa Regional Committee, which considers shares for index inclusion, meets on 7th March 2012. Subject to the independent deliberations of the FTSE committees, Greencore would expect to be included in the FTSE All-Share and the FTSE Small-Cap Indices from the start of business on 19th March 2012.

 

Greencore holds strong market positions in theUKconvenience food market across sandwiches, chilled prepared meals, chilled soups and sauces, ambient sauces and pickles, cakes and desserts andYorkshirepuddings. It is also extending its presence outside the UK with an emerging convenience food business in the US.

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Greencore Shows Resilience


Greencore, one of the leading players in the UK convenience foods market, has increased revenue by 8.7% to £804.2 million, and by 4.3% on a like for like basis, for the year ended 30th September 2011. However, group operating profit from continuing operations at £51.5 million was flat and the operating margin slipped to 6.4% compared to 7.0% in the previous year. Profit before tax (after exceptional items of £24.3 million) was £11.2 million, against £26.2 million in the previous year. Included in the exceptionals was a cost of £12.3 million for Greencore’s unsuccessful bid for Northern Foods.

 

The core Convenience Foods division delivered a good performance in some of the most challenging market conditions in many years with revenue growth of 8.0% to £732.2 million and operating profit up 5.3% to £49.3 million, resulting in an operating margin of 6.7%. The UK retail market has experienced a difficult year with volume declines for the first time in many years.

 

Patrick Coveney, chief executive of Greencore.

Against this background, Greencore has continued to grow revenues through its exposure to faster growing categories, through meeting consumer and customer needs and through new business gains. The UK business experienced input cost inflation of 4% and this was successfully mitigated through internal efficiency programmes, product reconfiguration and selective price increases.

 

During the year, Greencore strengthened its convenience foods business in both the US and the UK. In December 2010, the group completed the acquisition of On a Roll Sales, a US-based business predominantly manufacturing and distributing a ‘food to go’ offer for the convenience channel. The business has profitably grown revenues at over 20% since acquisition. In late September Greencore completed the acquisition of Uniq in the UK.

 

Grencore has also now completed the refinancing of its primary bank facility of £280 million for a five year term at competitive rates. The average debt maturity of the group at 30th September 2011 was 4.3 years compared to 2.0 years at September 2010.

 

“2011 has seen Greencore complete its transformation into a focused and growing convenience food business. Our underlying business continues to trade well,” comments Patrick Coveney, chief executive of Greencore. “The acquisitions that we made during the year in both the UK and US should be taken as a clear indication of our long-term strategy of supplementing organic growth with strategic corporate activity, and we are delighted with the way that the businesses are being quickly and efficiently integrated into the group. Whilst the UK and US food markets remain challenging, we are confident of being able to drive further growth and shareholder value through our close customer relationships, strong operational performance and outstanding products.”

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Greencore Offer Talks End


Negotiations about a possible offer by US private equity firm Clayton Dubilier & Rice to buy Greencore, one of the leading convenience food processors in the UK, have ended. Greencore announced the receipt of an approach on October 25th 2011.

 

The Greencore board emphasised that the discussions were at a preliminary stage and there was no certainty that any offer would be made. Such discussions were entered into with a view to establishing whether a proposal acceptable to the board, which could then be put to shareholders, would be forthcoming. Given the board’s unanimous view on the strong underlying value of Greencore and the current dislocation in global equity and debt capital markets, both parties have now agreed to end discussions.

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US Private Equity Firm Eyes Greencore


US private equity firm Clayton Dubilier & Rice is reported to have made an approach to buy Greencore, one of the leading convenience food processors in the UK. CD&R specialises in investing in market-leading companies that are typically underperforming. It has shown a preference for distribution- or services-related businesses. Rather than pursuing specific industry segments, the investment group concentrates on companies with broad ‘spread of risk’ characteristics, such as large customer and supplier bases and diverse revenue streams. According to Clayton Dubilier & Rice, it only invest where significant value can be created through operating performance improvements. CD&R has also successfully acquired stand-alone businesses in need of strategic repositioning.

 

CD&R has experience of owning large food businesses in both the UK and US. It acquired Brakes, the leading supplier to the food service markets in the UK and France in 2002. Before disposing of the business in 2007, CD&R helped Brakes to increase EBITDA by approximately 70% through a series of initiatives to improve margins, reduce costs, restructure operations and integrate acquisitions, all of which developed Brakes into one of Europe’s leading food service distributors. CD&R also owns US Foods, the second largest broadline food service distributor in the US, which was acquired in 2007.

 

Part of Greencore’s strategy is to develop its food service business in order to reduce its reliance on the multiple retail sector in the UK. Greencore has also been building a convenience food business in the US. Earlier this year, CD&R appointed Sir Terry Leahy, former chief executive of Tesco, as a senior adviser. Greencore is a key supplier to Tesco.

 

Greencore has still to realise the benefits of its recent £113 million acquisition of  Uniq, which will strengthen its standing in the food to go and chilled desserts sectors of the UK food market. Of course, Greencore had earlier in the year failed in its attempt to merge with UK convenience food group Northern Foods in an all share deal of equals to create Essenta Foods, a £1.7 billion turnover business. Boparan Holdings, controlled by Ranjit Singh Boparan, who is head of major British chicken processor 2 Sisters Food Group, spoiled Greencore’s plans with a successful £342 million cash bid for Northern Foods.

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Improved Trading Performance by Uniq


UK convenience food processor Uniq has continued to improve its trading performance in the first half ended June 30th 2011. Operating profit before significant items and group costs improved by 47% to £4.7m, compared to the corresponding period last year, on the back of improved trading in the compay’s food to go division and as a result of further restructuring within desserts.

 

Uniq’s balance sheet has also been transformed through a successful restructuring which removed the disproportionately large pension deficit. The pension restructuring gave rise to a significant credit to the profit and loss account and as a result shareholders’ funds improved from a negative position of £21.9m at 31st December 2010 to a positive £108.9m at 30th June 2011. The financial transformation enabled the group to conduct a sale process, initiated by the Pension Scheme, which resulted in a recommended offer from rival convenience food group Greencore.

 

Food to go sales increased by 9.0% reflecting continued strong growth in sandwiches on the back of a continuous programme of successful new product development. The growth in profitability to £5.8m, from £5.0m in the same period last year, reflects the division’s ability to manage profit margins through efficiency and tight control of costs in the face of higher raw material prices.

 

Desserts sales fell by 8.2% as a result of the loss of some low margin everyday desserts business, following the price increases pushed through in 2010 and as a result of the planned exit of cottage cheese. Positive progress was made in sales of premium desserts, reflecting the more favourable market dynamics in this sub-sector, while the sales of Cadbury chocolate desserts were flat. Despite the overall fall in desserts sales, the level of loss in this division reduced again to £1.1m compared to a loss of £1.8m for the same period last year.

 

Uniq’s acquisition by Greencore is subject to the outcome of the review by the Office of Fair Trading which is expected by the end of September 2011.

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Uniq to Exit Everyday Desserts


Uniq, the UK chilled food group, has decided to exit its unprofitable everyday desserts business and to close its production unit at Minsterley in the first half of 2012, with the loss of approximately 350 jobs. The move follows an in depth review of the group’s desserts division. Uniq will now focus on developing its growing, premium dessert and Muller/Cadbury desserts businesses.

 

The restructuring will entail the transfer of certain selected premium desserts sales from Minsterley to Uniq’s Evercreech site. The everyday desserts sales being exited are approximately £36m. The total cash cost of this restructuring is estimated to be approximately £10m, including capital investment.

 

Having previously announced in July 2011 the withdrawal from the premium differentiated yogurt market after April 2012 (sales of approximately £13m) , this will leave the scaled-down Minsterley site employing around 100 people focused solely on the Muller/Cadbury chocolate desserts business. The Evercreech business, having already exited cottage cheese in 2011, will become a focused premium desserts supplier.

 

Uniq is, of course, in the process of being acquired by Greencore, the Irish andUKconvenience food group. In addition to desserts, Uniq’s other main business is food to go.

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Greencore to Acquire Uniq For £113 Million


Greencore has made a recommended £113m cash offer for Uniq to significantly strengthen its position within the UK convenience foods market, chiefly within the food to go and chilled desserts categories. The acquisition of Uniq will add new and complementary customer relationships to Greencore, in particular with Marks & Spencer. The acquisition is being funded through a fully underwritten 5 for 6 rights issue at Eur0.46 per share to raise approximately Eur80.2m, and a new debt facility.

Uniq is owned by its Pension Scheme. This follows a deal last February when Uniq’s pension debt of more than £400m was exchanged for a 90.2% stake in the group.

In its last financial year, Uniq continued the improvement in its performance by increasing turnover by 6.8% to £312m and reporting an operating profit before significant items of £4.1m compared to a loss of £1.9m in 2009. The food to go business increased sales by 13% to £157m and profits by 51% to £11m. Uniq’s desserts sales rose by 1.5% to £155m and losses were reduced by 6.9% to £2.7m.

Patrick Coveney, chief executive of Greencore.

Greencore is projecting annual net cost synergies of at least £10m for the acquisition through the elimination of duplicated corporate, divisional and functional overheads, and the overlapping nature of the respective supply chains.

Greencore expects the acquisition and associated financing, including the rights issue, to deliver mid-single digit (percentage point) adjusted earnings per share accretion in the financial year to end September 2012 and to be significantly accretive in years thereafter.

“The proposed acquisition of Uniq delivers demonstrable further scale in two key categories – food to go and chilled desserts, and is underpinned by substantial synergies. Furthermore, it broadens Greencore’s commercial footprint and it is perfectly aligned to our strategy,” says Patrick Coveney, chief executive of Greencore. “It represents an important milestone as we extend the scale and leadership positions of our group in the UK convenience market.”

Geoff Eaton, chief executive of Uniq, comments: “It is a good offer from a strong business that provides an excellent strategic fit and, as such, represents the best outcome for employees, pension members and shareholders, as well as an exciting opportunity for Greencore. The Uniq team has done an exceptional job over the past two years to find a solution to Uniq’s pension scheme issues, whilst continuing to deliver a high quality service to our customers. As a result, the building blocks are in place for the Uniq businesses to realise their full potential with a committed, long-term owner, such as Greencore.”

Of course, Greencore failed earlier this year in its efforts to achieve an all-share merger of equals with Northern Foods, when its bid was trumped by Boparan Holdings with a £342m cash offer.

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Greencore Withdraws From Battle For Northern Foods


Greencore has announced that it does not intend to make a revised offer for Northern Foods. Greencore had initially proposed an all-share merger of equals between two of the leading convenience food groups in the UK, to create Essenta Foods, a £1.7b turnover business with strong positions in private label production along with significant brand strength in biscuits and frozen pizzas, respectively through the Fox’s and Goodfella’s brands. The merger was expected to yield cost synergies of £40m per annum within three years.

However, the proposed merger deal was subsequently trumped by a £342m cash offer for Northern Foods by Boparan Holdings, headed by chicken business entrepreneur Ranjit Singh Boparan.

Over the past few weeks Greencore has been working with a partner in order to agree a simultaneous sale of certain of the Northern Foods branded businesses. This approach was intended to provide significant funding and allow Greencore to acquire only the parts of the Northern Foods business with the greatest synergy potential.

This relatively complex structure required a range of stakeholders to reach agreement. However, after substantial investigation, the Greencore board has determined that an improved offer could not be concluded on terms which would deliver sufficiently strong returns to Greencore shareholders. Costs incurred, net of recoveries, will be treated as exceptional charges in the first half of Greencore’s 2011 Financial Year.

Meanwhile, Boparan has announced that it has acquired or agreed to acquire or received valid acceptances in respect of approximately 48.25% of the existing issued ordinary share capital of Northern Foods. The offer will remain open until 16th March 2011.

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Boparan Now Holds 34% of Northern Foods as Offer Deadline Extended


Boparan Holdings, headed by chicken business entrepreneur Ranjit Singh Boparan, now controls more than a third of Northern Foods, the leading UK convenience food group. On January 21st 2011, Boparan made a £342m offer for Northern Foods, which was recommended by the board of Northern Foods in preference to an earlier offer by Greencore involving an all share merger of equals.

By the end of January, Boparan, which had already assembled a 6.6% stake in Northern Foods prior to its offer, had increased its shareholding to 11.4%. Boparan now has in aggregate acquired or agreed to acquire or received valid acceptances representing approximately 34.4% of Northern Foods’ shares. Boparan has extended its offer deadline from March 2nd until 1.00 pm on March 16th 2011.

The board of Greencore has noted the announcement by Boparan relating to its cash offer for Northern Foods and the extension of the deadline. Greencore has confirmed it is still considering its options in relation to Northern Foods and a further announcement will be made in due course.

Greencore has been reported to have been seeking a partner to make an improved offer for Northern Foods with a cash element involved. It is understood to have held discussions on this matter with a number of major food groups and private equity firms.

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New Financial Chief For Greencore


Alan Williams, formerly with Cadbury for over 18 years, is joining Irish and UK convenience food group Greencore as chief financial officer in March. Alan Williams’ most recent role was global corporate finance director, with responsibility for leading the central finance functions within Cadbury. Previously he served as head of finance for the US confectionery operations of Cadbury and of its French beverages business.

He will assume the position from Imelda Hurley, who has been the acting chief financial officer since the departure of Geoff Doherty last December. Imelda Hurley will take up the position of group finance director, reporting to Alan Williams.

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Greencore Still Considering its Options on Northern Foods


In response to recent press speculation about whether or not it will amend its offer for Northern Foods, the board of Greencore has confirmed that it is still considering its options. Dublin-based Greencore, which is one of the UK’s leading convenience food groups, had proposed an all-share merger of equals with British rival Northern Foods. However, Boparan Holdings, controlled by chicken business entrepreneur Ranjit Singh Boparan, surpassed Greencore’s bid by making a cash offer of 73p a share for Northern Foods.

Boparan’s £342m offer has been recommended by the board of Northern Foods in preference to Greencore’s offer. Boparan has now built up an 11.4% stake in Northern Foods.

Patrick Coveney, chief executive of Greencore.

Greencore is reported to be seeking a partner to make an improved offer for Northern Foods with a cash element involved. It is understood to have held discussions on this matter with a number of major food groups, including Nestle.

Boparan has now posted its offer document, containing the full terms and conditions of the offer, to Northern Foods shareholders, together with the form of acceptance. Northern Foods’ shareholders have two weeks to respond to Boparan’s offer, although the deadline is expected to be extended should the 75% acceptance threshold fail to be reached. In anticipation of a counter-bid, Northern Foods shares have been trading at 75p.

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Boparan Increases Stake in Northern Foods to 11.4%


Following its £342m bid for Northern Foods, Boparan Holdings has now increased its stake in the UK convenience food group from 6.6% to 11.4%. Boparan Holdings, which is controlled by food business entrepreneur Ranjit Singh Boparan, made a 73p a share offer for Northern Foods on Friday.

It has since acquired 22.4m ordinary shares of Northern Foods (representing approximately 4.8 % of the issued share capital) at a price of 73 pence per share. Bopara’s cash offer of 73p per share has been recommended by the board of Northern Foods in preference to an earlier all-share merger proposal by Greencore, the Irish and UK convenience food group.

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Greencore Considers its Options


In response to the recommended cash offer by Boparan Holding for Northern Foods, the board of Greencore has announced that it continues to believe that a combination with Northern Foods to create Essenta Foods represents a compelling opportunity for value creation for both Greencore and Northern Foods shareholders. Given the latest development, the board of Greencore will now consider its options and will make a further announcement in due course.

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Boparan Makes Late £342 Million Bid For Northern Foods


Boparan Holdings, which is controlled by food business entrepreneur Ranjit Singh Boparan, has made a 73p a share offer for UK convenience food group Northern Foods. Boparan already owns a 6.6% stake in Northern Foods.

The £342m bid was made following the granting of a two hours extension to the deadline given by the UK Takeover Panel and scuppers a proposed all-share merger of equals between Northern Foods and Greencore Group, another leading convenience food company in the UK.

The board of Northern Foods is recommending the Boparan offer and has withdrawn its support for the Greencore merger. Accordingly the Northern Foods directors are recommending that Northern Foods shareholders vote against the Greencore merger at the meetings on the 31st January 2011.

The proposed merger between Northern Foods and Greencore would have created Essenta Foods, a £1.7b turnover business with strong positions in private label production along with significant band strength in biscuits and frozen pizzas, respectively through the Fox’s and Goodfella’s brands. Essenta Foods would be owned equally by Northern Foods’ and Greencore’s shareholders. Integrating the two businesses was expected to yield cost synergies of £40m per annum within three years, with at least half being realised within the first 12 months after completion.

The Essenta deal had also proposed putting £15m a year into Northern Foods’ pension fund to plug a deficit of £142m. Boparan has also met with Northern Foods’ pension trustees and agreed terms.

The Boparan offer price of 73p a share represents a 61% premium to Northern Foods’ share price before the merger agreement with Greencore and is 52% higher than the implied value of Northern Foods under the Greencore merger proposal.

“The combined group will be one of Britain’s major food suppliers with a turnover of more than £2 billion. This will create significant opportunities which will benefit customers, consumers and employees. We look forward to working with the experienced Northern Foods team and combining our skills in product innovation and customer partnerships to create a larger business with enhanced prospects,” says Ranjit Singh Boparan.

Commenting on the offer, Anthony Hobson, chairman of Northern Foods, says: “This attractive cash offer provides shareholders with an immediate premium to the value of Northern Foods within Essenta Foods, the proposed merger with Greencore we announced in November 2010. The bid from Boparan is a compelling opportunity for our shareholders to realise a cash exit, and as such the board of Northern Foods will be unanimously recommending that Northern Foods shareholders accept Boparan’s offer.”

Ranjit Sing Boparan is chief executive of chicken processor the 2 Sisters Food Group, which he established in 1993, developing the company from a small scale frozen retail cutting operation into a £700m turnover international food business with ten manufacturing sites in the UK, six in Holland and one in Poland.

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Boparan Given Northern Foods Offer Deadline


The British Panel on Takeovers and Mergers has ruled that Boparan Holdings, controlled by food business entrepreneur Ranjit Singh Boparan, must make an offer for Northern Foods or confirm that it does not intend to make an offer by January 21st 2011. The decision follows Boparan’s announcement on December 22nd last that it was considering a possible offer for Northern Foods.

The boards of Northern Foods and Greencore Group, which have already recommended an all share merger of the two convenience food groups to create Essenta Foods, have welcomed the Panel’s decision to set a timetable to clarify Boparan’s intentions.

If Boparan confirms that it does not intend to make an offer for Northern Foods then it is precluded from making any further approach for six months. The shareholders of Northern Foods and Greencore are due to meet on January 31st to decide upon the merger.

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Boparan Considering £300m Hostile Bid For Northern Foods


Food industry entrepreneur Ranjit Singh Boparan, who is head of the 2 Sisters Food Group, one of Europe’s leading poultry processors, is reported to be planning a £300m hostile bid for leading UK convenience food group Northern Foods, which could scupper its proposed merger with Greencore. Ranjit Singh Boparan has already assembled a 6.6% stake in Northern Foods.

The boards of Northern Foods and Greencore, also a leading player within the UK convenience food market, have already agreed terms on a recommended merger to create Essenta Foods, a £1.7b turnover business with strong positions in private label production along with significant band strength in biscuits and frozen pizzas. The merger is projected to yield cost synergies of £40m per annum within three years.

The board of Northern Foods has confirmed that is has received a letter from Boparan Holdings requesting access to certain information pursuant to Rule 20.2 of the City Code on Takeovers and Mergers. The letter contained no further details regarding Boparan’s intentions and Boparan has not made an offer proposal to the board, nor has it indicated the price at which any offer may be made.

Since the start of 2009, Ranjit Singh Boparan has acquired Storteboom Group, a Netherlands-based poultry processing business; Five Star Fish, a leading UK supplier of added-value, prepared fish to the food service sector; and famous seafood restaurant chain – Harry Ramsden’s. The prices of all three deals were undisclosed.

An acquisition of Northern Foods by Boparan Holdings is unlikely to yield the same level of synergies as the proposed merger with Greencore.

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Greencore Acquires US Sandwiches Business


UK and Irish convenience food processor Greencore Group is extending its chilled prepared foods business in the US with the acquisition of On A Roll Sales, a manufacturer of fresh sandwiches based in Brockton, Massachusetts, for an undisclosed sum. Gross assets of the business being acquired at September 30th 2010 were $3.4m.

“On A Roll is a promising, growing business with a well diversified customer base of major retailers and convenience stores. This acquisition, will provide an additional revenue stream to Greencore USA’s food to go category and will complement our existing businesses in Newburyport and Cincinnati,” points out Eoin Tonge, group development director of Greencore.

Tony Hynes.

Greencore holds significant positions in the UK convenience food market across sandwiches, chilled prepared meals, chilled soups and sauces, ambient sauces and pickles, cakes and desserts, and Yorkshire puddings. Of course, Greencore is in the process of merging with rival UK convenience food group Northern Foods to create Essenta Foods, a £1.7b turnover business.

Meanwhile, Tony Hynes has decided to step down from his executive role at Greencore. Tony Hynes has helped develop the strategy of the business since his appointment in 2001 during a period of significant change in the company, its markets, its portfolio and the leadership team. He will remain on as chairman of the US business over the next twelve months.

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2 Sisters Founder Takes Stake in Northern Foods


Food industry entrepreneur Ranjit Singh Boparan, who is head of the 2 Sisters Food Group, one of Europe’s leading poultry processors, has bought a 6.6% stake in Northern Foods, ahead of its proposed merger with Greencore to create Essenta Foods.

The deal is the latest in a recent series of acquisitions in both the food manufacturing and food service sectors completed by Ranjit Singh Boparan. Since the start of 2009, he has acquired Storteboom Group, a Netherlands-based poultry processing business; Five Star Fish, a leading UK supplier of added-value, prepared fish to the food service sector; and famous seafood restaurant chain – Harry Ramsden’s. The prices of all three deals were undisclosed.

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Northern Foods and Greencore to Create £1.7 Billion Convenience Foods Giant


Northern Foods and Greencore, two of the UK’s leading convenience food processors, are to merge to create Essenta Foods, a £1.7b turnover business with strong positions in private label production along with significant band strength in biscuits and frozen pizzas, respectively through the Fox’s and Goodfella’s brands. The merger is expected to yield cost synergies of £40m per annum within three years, with at least half being realised within the first 12 months after completion. The merger is scheduled to be completed during the second quarter of 2011.

Essenta Foods will be owned equally by Northern Foods’ and Greencore’s shareholders. The combined business will have a high quality asset base with 33 facilities in the UK, eight facilities in Ireland and two facilities in the US.

It will benefit from strong market positions in growing segments of the market such as sandwiches and ready meals, which in the UK have experienced 9.8% and 7.7% market growth respectively in the last year. Greencore and Northern Foods have invested significantly in their respective businesses in recent years and consequently the combined group will have sufficient capacity to support further market growth in these and other segments of the market.

“The proposed merger is a great opportunity to develop fully the potential of both companies. It will create a sustainable, top tier organisation which will be capable of delivering best in class food products and innovative solutions to its customers,” says Anthony Hobson, chairman of Northern Foods.

Patrick Coveney, chief executive of Greencore.

Patrick Coveney, chief executive of Greencore, who will head the merged group, comments: “Essenta Foods presents a compelling opportunity for all stakeholders. It creates a substantial chilled prepared food company in fast growing categories in the UK which is enhanced by strong branded positions in biscuits and frozen food. The investment case is underpinned by tangible cost synergies and the platform for further growth in the UK, Ireland and the US. The time is right for both companies to build a real ‘better than both’ business and I look forward to bringing together the teams from Greencore and Northern Foods to deliver on this opportunity.”

Northern Foods recently reported an operating loss of £9.5m including restructuring charges and a drop in turnover for the six months to October 2nd 2010 as improvements in its chilled foods and bakery businesses were offset by a loss in frozen foods. Although like-for-like sales grew 2.7% in the first half, and by 6% in the second quarter, total sales were £453.0m against £466.9m in the corresponding period in the previous year. Operating profit (pre-restructuring) was £17.5m (down from £20.5m in the previous year), reflecting chilled food profits up from £7.2m to £11.8m, bakery profits up from £8.2m to £10.3m but the frozen foods recording a loss of £4.6m, against a profit of £5.1m in the first half of 2009/2010.

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Strong Annual Operating Performance by Refocused Greencore


Following three strategic disposals to become sharply focused on its UK, Irish and US convenience foods operations, Greencore has reported a 17.6% rise in group operating profit from continuing operations to Eur59.7m on sales up by 6.9% to Eur856.9m for the year ended September 24th 2010. Group operating margin from continuing operations improved by 63bps to 7.0% and Greencore also achieved a 31.8% reduction, year on year, in group net debt to Eur193.4m.

Sales in continuing businesses at the convenience foods division advanced 10.7% to Eur784.5m and operating profit increased 21.1% to Eur54.1m as Greencore capitalised on consumer trends of increased ‘at home’ and ‘on the go’ food consumption and benefited from lower UK manufacturing capacity and the further delivery on its lean and operating efficiency programmes. Sales at Greencore’s US convenience foods business grew by 18%.

Following the disposal of its malt, water and continental European convenience foods businesses for an aggregate total consideration of Eur142.3m, Greencore is a leaner, more focused convenience foods group with two key geographies, the UK and the US. The remaining, non-core ingredients and property business is trading satisfactorily and represents less than 10% of group sales and operating profit.

“We have made enormous progress in reshaping our group into a focused, growing convenience food business this year. This is reflected in the strong sales, margin and profit growth in the results of our continuing business,” points out Patrick Coveney, group chief executive of Greencore. “Furthermore, an effective disposal programme has dramatically reduced group net debt and provides the basis for further development in convenience food.”

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Greencore Expects 20% Jump in Annual Profit


Greencore, which is one of the UK’s leading convenience food manufacturers and also has operations in the US, expects group operating profit, excluding exceptional items and amortisation, on continuing businesses for the twelve months ended September 24 2010 to be about 20% ahead of the previous year. Sales from continuing businesses in convenience foods are expected to be about 8% higher than in 2009.

Greencore will release its preliminary results for the 2010 financial year on Tuesday 23rd November.

Looking ahead, based on the current run rate of the business and an expected significant reduction in the group’s interest bill reflecting a full year benefit associated with the FY10 disposals, Greencore is projecting a strong performance in its ongoing business in FY11.

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Greencore Completes Disposal of Dutch Convenience Food Business


Leading UK and Irish convenience food manufacturer Greencore Group has completed the sale of its Netherlands-based convenience foods business, Greencore Continental, to Convenience Foods Europe, a subsidiary of Parcom Buy Out Fund IV.

Greencore Continental supplies sandwiches, chilled pizzas and chilled sauces to customers based in Continental Europe. It operates from two facilities located at Liessel and Alphen in The Netherlands. The turnover of Greencore Continental was Eur58.2m for the year ended 25th September 2009 and the net assets of the business were Eur12.7m at that year end date.

Partrick Coveney, chief executive of Greencore.

The proceeds from the deal will be used to reduce Greencore’s net debt. According to Partrick Coveney, chief executive of Greencore, the disposal is in line with the group’s strategy of developing an industry leading position in convenience foods in the UK supplemented by a growing convenience foods business in the US.

Greencore enjoys strong market leadership positions in the UK convenience food market across sandwiches, chilled prepared meals, chilled soups and sauces, ambient sauces and pickles, cakes and desserts and Yorkshire puddings.

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Greencore to Dispose of Dutch Convenience Food Business


Greencore Group is selling its Netherlands-based convenience foods business, Greencore Continental, to Convenience Foods Europe, a subsidiary of Parcom Buy Out Fund IV.

Greencore Continental supplies sandwiches, chilled pizzas and chilled sauces to customers based in Continental Europe. It operates from two facilities located at Liessel and Alphen in The Netherlands. The turnover of Greencore Continental was Eur58.2m for the year ended 25th September 2009 and the net assets of the business were Eur12.7m at that year end date.

Partrick Coveney, chief executive of Greencore.

The Disposal requires prior consultation with the relevant Works Councils as well as regulatory approval from the Netherlands Competition Authority. Completion of the deal is expected to occur on or before 30th August 2010. The proceeds will be used to reduce Greencore’s net debt. 

According to Partrick Coveney, chief executive of Greencore, the disposal is in line with the group’s strategy of developing an industry leading position in convenience foods in the UK supplemented by a growing convenience foods business in the US. Greencore is one of the UK’s largest manufacturers of convenience foods.

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