Greencore snaps up ready-meals maker in US for €10.3m
GREENCORE continued its recent acquisition spree in the United States after it bought a ready-meals maker that supplies convenience shops including 7-Eleven.
In a statement to the London Stock Exchange yesterday, Greencore said it agreed to acquire HC Schau & Son, a fresh-food manufacturer with facilities in Chicago, Illinois, and Jacksonville, Florida.
The move will be worth €10.3m immediately, and could increase to €15.5m if certain performance targets are met.
The deal will form a "critical part" of the supply network for what Greencore called a "significant new multi-regional contract gain in food to go with a national food service chain".
Last year, Schau recorded revenues of $32m (€25.6m).
The Irish company said the acquisition would "provide the capability and capacity to drive growth in the US, both with existing customers and with the recent new business win".
This is the latest deal that Greencore boss Patrick Coveney has secured in the US. Last year, he bought the Boston-based sandwich maker On A Roll, and followed that with the takeover of Marketfare Foods in April, which supplies salads to 7-Eleven.
In addition, Greencore has put in place a multi-year partnership with the new customer to supply Schau's 7-Eleven stores with approximately $50m of food to go products on the East Coast and in the Midwest from four of the company's facilities.
The new deliveries will be phased in between September 2012 and March 2013.
The transaction will be funded from existing debt facilities and will have a "minimal impact" on the group's leverage.
Integration and transaction expenses are estimated at $2.5m and will be treated as an exceptional item in the final year accounts.
Mr Coveney said the deal, combined with April's Marketfare purchase, "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," he said.
The move was welcomed by analysts. Investec's Nicola Mallard said the acquisition indicated a strong turnaround in the firm's US fortunes, with combined revenues from its American operations now expected to touch $240m by the end of next year.