Sector News

Greencore to buy U.S. firm Peacock for $748 million

November 14, 2016
Food & Drink

Britain’s biggest sandwich maker Greencore Group said on Monday it would buy U.S. convenience food manufacturer Peacock Foods for $747.5 million (598 million pounds)in a bid to transform its U.S. business.

The announcement sent Greencore’s shares up 12 percent.

Irish-registered but London-listed Greencore had signalled an intention to expand in the United States where it already produces sandwiches, salads, sushi and deserts for customers including Starbucks and the 7-Eleven convenience store.

It said it expects the deal to more than quadruple its total sales in the United States to contribute around 42 percent of group revenue, up from around 15 percent currently.

Illinois-based Peacock focuses on frozen sandwiches for breakfast consumption, snack kits for children and salad packs, among other items.

Greencore expects to see significantly enhanced earnings and a targeted return ahead of cost of capital from the first full year of ownership.

“This is a huge deal for Greencore, it gives us real scale, real reach and a very strong performance in the United States and it rebalances our portfolio,” Greencore Chief Executive Patrick Coveney said in a statement.

The news sent shares in Greencore up 12 percent in early trading on Monday, giving it a market value of 1.4 billion pounds ($1.8 billion).

Greencore, founded 25 years ago, will buy the business on a debt free and cash free basis, backed by a fully underwritten rights issue offered to qualifying shareholders.

Coveney does not expect the deal to be affected by any changes to global trade that may come from the election of Donald Trump as president, with its food manufactured locally for local brands, he said.

“Whatever may happen and frankly I’m not sure people know yet in terms of the implications for global trade once Donald Trump becomes president, it’ll have very little impact on underlying food demand for U.S. consumers,” he told Irish national broadcaster RTE.

“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,” Peacock Foods CEO Tom Sampson said in a statement.

($1 = 0.8008 pounds)

By Kate Holton and Padraic Halpin

Source: Reuters

comments closed

Related News

May 21, 2022

Cécile Béliot becomes Bel Group CEO

Food & Drink

Cécile Béliot has assumed the role of Bel Group chief executive officer, following the decision to separate the roles of chairman and CEO. The separation of the functions will enable Bel Group to develop in three areas of healthy snacking. Meanwhile, the company’s former CEO, Antoine Fiévet, has had his mandate renewed as chairman of the board.

May 21, 2022

“Corporate greed and dereliction of duty”: FDA commissioner slammed over infant formula shortage

Food & Drink

US Food and Drug Administration (FDA) Commissioner Dr. Robert Califf was grilled by lawmakers during a House Appropriations subcommittee hearing, where he was slammed over the agency’s handling of the escalating infant formula shortage.

May 21, 2022

Sweegen hails antioxidants and bitter blocking tech a turning point for sugar reduction and healthy aging

Food & Drink

Sweegen is ramping up its efforts to reduce sugar across F&B applications while simultaneously tapping into the benefits of using antioxidants and bitter blocking technology. Speaking to FoodIngredientsFirst, Casey McCormick, vice president of global innovation at Sweegen, says product developers can find a broad range of solutions in Sweegen’s nature-based sweetener systems as brands elevate better-for-you foods.