Greencore offloads Dutch convenience unit
Friday July 16 2010
GREENCORE is to sell off its continental convenience foods business, the company said yesterday.
The Irish food company, the UK's largest sandwich maker, said it had agreed terms to sell the Netherlands-based Greencore Continental to Convenience Foods Europe, a subsidiary of the investment firm Parcom Capital.
Terms of the deal were not disclosed. Last year the Dutch unit, which supplies sandwiches, pizzas and chilled sauces to customers on continental Europe, reported turnover of €58.2m and the net asset value of the business was €12.7m.
Although the deal is subject to talks with the relevant works councils and approval by Dutch regulators, a Greencore spokesman said the firm was confident that the deal would go through. The sale is expected to be completed no later than the end of next month.
Greencore chief executive Patrick Coveney described himself as "pleased" with the deal and said it fitted in with the overall plan for the business.
Strategy
"[It] is in line with our strategy of developing an industry leading position in convenience foods in the UK supplemented by a growing convenience foods business in the US," he said.
The move comes five months after the group sold its malt business to the French co-operative AxerealUnion De Co-operatives Agricoles in February in a deal worth up to €116.25m. Last November it agreed a deal to sell its bottled water business to Highland Spring for up to €19.6m.
The sale was welcomed by analysts. "Greencore Continental was struggling in a very competitive market so the sale has been expected," said Joe Gill of Bloxham Stockbrokers.
"It is believed the proceeds of the sale will be spent on either debt reduction or expanding the business in the US.
"The bottom line is that the US market is essential to Greencore so in that context this sale is a sensible move," he added.
Liam Igoe of Goodbody Stockbrokers said: "A deal along these lines has been expected since the sales of the water and malt divisions.
"This allows Greencore to focus more on its core businesses," he added.
- Peter Flanagan
Irish Independent
