Irish food supplier Greencore to sell entire US business for €927m
Irish food-to-go supplier Greencore has reached an agreement to sell its entire US business to Hearthside Food Solutions for £817m (€927m).
Greencore said it will hand a large part of the proceeds to shareholders via a special dividend of £509m, or 72 pence per ordinary share.
The group said that the deal will also "support a strengthened balance sheet", with up to £293m helping to reduce leverage.
The transaction EV / EBITDA is a multiple of 13.4x/14.2x2,3.
Hearthside is a scale US contract food manufacturer with a heritage in US food industry outsourcing.
Greencore’s CEO, Patrick Coveney, said that the proposed sale represents "compelling and immediate realisation of value" for company shareholders.
"We have always had a firm conviction on the underlying value and growth prospects of our US business and believe that this offer fully reflects that," he said.
The intention post-transaction is that Greencore will have greater financial and strategic flexibility in its core UK market, with potential for dynamic capital management.
"Looking ahead, we are confident that we can deliver further growth and returns in the dynamic UK market," said Mr Coveney.
"The proposed transaction would enhance our strategic and financial flexibility, which would allow us to build on our industry-leading position in our core UK market whilst also taking advantage of emerging organic and inorganic growth opportunities."
Completion of the deal is expected by late November 2018, conditional on approval of Greencore shareholders and US HSR clearance.