Hilton Food Group announces acquisition of Fairfax Meadow

Fairfax Meadow was established more than 40 years ago and supplies some of the largest businesses in the UK hospitality and travel sectors. The business operates four meat processing and packing facilities in Derby, Milton Keynes, North London and Southampton and was recovering strongly from the pandemic's impact, as foodservice channels fully reopened, Hilton claimed.

The acquisition would improve its access to the out-of-home channel Hilton said, harnessing existing partnerships and contributing to further sustainable growth for the business.

The deal has been funded via Hilton's debt facilities.

£2.3m loss in 2020​

Fairfax Meadow generated a loss of £2.3m in earnings before interest, taxes, depreciation and amortisation (EBITDA) in the year ended 31 December 2020, after adjusting for exceptional items and reflecting COVID-19's impact. That compared with EBITDA profit of £4.4m in the year ended 31 December 2019.

The combined value of the business' gross assets was £20.1m at the end of 2020, according to Hilton.

Panmure Gordon analyst Matthew Webb said Fairfax Meadow's 2020 EBITDA loss was unsurprising, given the closure of large parts of the foodservice channel for most the the year due to the pandemic.

'Robust recovery'​

"However, what is relevant to HFG​ [Hilton Food Group] is how Fairfax performs in 2022 and it is already 'recovering strongly',"​ said Webb. "We do not expect it to recover fully to 2019 levels in 2022, with trading in the foodservice channel likely to be 10%-15% below the pre-COVID level. This would nonetheless allow for a robust recovery.​

"On the revenue side, HFG's wider range of proteins, including vegetarian and vegan food, fish and sous vide, will allow Fairfax to broaden its product offering. We also expect HFG to invest in the business to increase its capacity. On the profitability side, HFG will undoubtedly have better buying power and sourcing expertise and should therefore be able to reduce input costs."​

Pre-tax profit boost of £1.8m​

He expected the acquisition to boost Hilton's pre-tax profit for 2022 by £1.8m.

Hilton chief executive officer Philip Heffer said: "This transaction is all about growth. ​With its award-winning reputation, Fairfax Meadow represents a great opportunity for Hilton to expand into an adjacent and growing foodservice sector in the UK.​

It is another step towards our goal of becoming the protein partner of choice for every meal occasion - offering high quality, affordable, and rigorously sourced proteins for customers and consumers here in the UK and across the world.​

Hilton's product range​

"We look forward to leveraging Hilton's expertise, reputation and investment to grow and expand the Fairfax business, and we plan to offer Hilton's broad product range, including sous vide, seafood and alternative protein products, to Fairfax's customers."​ 

Fairfax Meadow managing director Penny Tomlinson, who will continue to lead the company for the foreseeable future added: "Fairfax Meadow is built on a foundation of longstanding, strong, customer and supplier relationships which we will continue to develop as we move forward together.​

"Philip and the team at Hilton have followed our progress closely over the past few years and by joining forces now, we will have the right platform and investment for the next phase of Fairfax Meadow's growth.​

Butchery and foodservice​

"With Hilton's retail supply chain expertise, quality management and leading sustainability standards, together with our longstanding reputation for butchery and foodservice excellence, this is a fantastic opportunity."​

Hilton Food Group also announced a trading update for 19 July 2021 to date, claiming strong performance, and growth in its slow cooked business in the UK and Central Europe.

The company said there had been continued volume growth in fresh food across both Tesco and Zabka and progress expanding the business across a wider range of protein categories. Its trading subsidiary Hilton Food Solutions had also performed well, due to the re-opening of foodservice and successful trading with European customers, it said.