UK-listed Greencore announces $750m deal for US frozen breakfast sandwich maker Peacock Foods

 
William Turvill
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Greencore Convenience Foods Manufacturing Site In Bristol
Greencore supplies food retailers with products such as sushi and ready meals (Source: Greencore)

Food supplier Greencore Group has agreed a $747.5m (£594.3m) takeover deal for Peacock Foods, a US company specialising in frozen breakfast sandwiches.

Peacock, which also makes chilled meal kits for children and salad kits, generates revenues of approximately $1bn and reported adjusted earnings before interest, taxation, depreciation and amortisation (ebitda) of $72.1m in the year to September.

“The acquisition of Peacock will transform our US business, strengthen our position in high growth categories, broaden our channel and customer exposure, and add significant scale to our operations,” said Greencore chief executive Patrick Coveney.

Read more: Greencore bags The Sandwich Factory from Cranswick in tasty £15m deal

“We believe Peacock's success is built on the same fundamental strategy and values that drive Greencore, making products that consumers love, building deep, longstanding relationships with customers, investing in high quality manufacturing capacity, food safety capability and, most importantly, people.”

Peacock Foods chief executive Tom Sampson said: “We have been particularly struck by the similarities in the way we run our business and our mutual long-term commitment to the US convenience food market.

“We are excited by the opportunity that we now have to leverage Greencore's expertise in innovation and fresh food manufacturing, thereby bringing a broader set of capabilities to our customers.”

Read more: Greencore serves a jump in quarterly sales

UK-listed Greencore said the deal will be financed through a fully-underwritten rights issue to raise £439.4m and new debt facilities making around £200m.

Greencore, which supplies supermarkets with products ranging from sushi to cakes and Yorkshire puddings, expects to complete the acquisition on 30 December.

BEHIND THE DEAL

Seamus Moorhead – Greenhill

  • Moorhead, managing director of Greenhill, has been at the firm since 2009 when he joined from UBS, where he spent 18 years.
  • The deal has been in the making since March, and he said the Brexit vote and Donald Trump election did not disrupt its progress.
  • Moorhead managed to take some time off from the deal last Saturday, travelling to Twickenham to watch England beat South Africa for the first time in a decade.

Also advising…

Mark Dickenson and Samuel Hart, of HSBC, and Linda Hickey and John Flynn, of Goodbody Stockbrokers, acted as joint sponsor to Greencore.

The rights issue financing the deal is also underwritten by Jefferies International and Rabobank.

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