Its products are distributed primarily in the grocery and convenience channels, and the hitherto privately owned business operates from a single facility in Boston, Lincolnshire. It claims to have invested more than £14m in the plant since 2000 and employs 350 staff.
The acquired business would extend Greencore’s presence in food-to-go salads and chilled snacking and Freshtime’s strong customer base was highly complementary to the Group’s existing portfolio, Greencore said.
Freshtime’s production facility was well invested, with an established local supply chain and capacity for future growth, according to Greencore, which already distributes a large proportion of Freshtime’s products through its Direct to Store network.
Modest profit in 2020
Total consideration for the acquisition comprises an enterprise value of £56m, cash on the acquired balance sheet and a normalised level of working capital. This would be funded from existing debt facilities and the group said the deal would leave it with moderate debt levels and would start delivering modest profit in the 2020 financial year.
In the 12 months ended December 2018, Freshtime generated revenues of £66m and pre-tax profit of £5.6m. Gross assets at 31 December 2018 were £22m.
Greencore has acquired the whole of the issued share capital of The Bay Group, parent company of Freshtime UK, from John Curran Mills Richmond.
Freshtime ‘an excellent strategic fit’
“Freshtime is an excellent strategic fit for Greencore,” said Greencore chief executive Patrick Coveney, commenting on the transaction. “It is a business and a customer set that we know very well and it provides us with an exciting opportunity to enhance our product offering, add further capacity to our manufacturing network, and help drive growth and value for shareholders. We look forward very much to welcoming the Freshtime team to Greencore.”
Announcing strong half-year figures in May, Greencore reported growth in pre-tax and operating profit, while group revenue fell 4.6% to £701.4m in the six months to 29 March 2019. This followed the sale of its US business in November to contract manufacturer Hearthside Food Solutions for $1.1bn (£817m).