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Greencore to splash $36m on US-based convenience food firm

GREENCORE is to spend nearly €30m on a US ready meals business as it seeks to boost its operations across the Atlantic.

In a statement, the Irish company said it will pay $36m (€29m) for Marketfare Foods, which supplies sandwiches and other convenience foods to 7-Eleven and other stores across the eastern United States and beyond.

The deal will see Greencore take over two plants. One in Fredericksburg, Virginia, is outside Boston, while the second is further west in Salt Lake City, Utah.

Marketfare's principal customer is 7-Eleven, which it has partnered for more than 20 years and it is the largest single supplier of 'Fresh to Go' and '7-Smart' store-branded sandwiches, servicing over 1,100 stores in the Mid-Atlantic region from its Fredericksburg plant.

The Salt Lake City side of the business manufactures cheese and chilli sauces for the entire 7-Eleven chain in America and Canada.

The company employs some 350 staff and recorded operating profits of nearly $6m on revenue of $65m last year. The deal is being funded out of existing debt facilities.

Company chief executive Patrick Coveney was pleased with the deal.

While the acquisition is not enormous, it signals a renewed emphasis on the American market for Greencore.

"This builds a lot of scale and fits right into our strategy in the United States, so it is very pleasing for us," he said.

"The addition of Marketfare will take our 'run-rate' from around 100 million to 160 million per year, so in the context of our American business it is very important."

Mr Coveney added that while there were no immediate plans for more acquisitions in the US, his firm would continue to look at opportunities as they arose.

Greencore already owns 'On a Roll', a Massachusetts-based sandwich business.

The stock closed up 1.02pc at 74p. It is up more than 42pc so far this year.

Irish Independent