Premier offloaded the business for GBP41m (US$63.6m)

Premier offloaded the business for GBP41m (US$63.6m)

Premier Foods plc has sold its vinegar and sour pickles business, including the Sarson's and Haywards brands, to Japanese food group Mizkan.

The UK food manufacturer, which is looking to dispose of its "non-core" assets, said today (15 June) it had offloaded the business for GBP41m (US$63.6m).

The vinegar and pickles unit generated revenue of GBP34m and EBITDA of GBP6.2m in 2011. Premier said it expects the sale to be "initially earnings dilutive".

Under CEO Michael Clarke, Premier is focusing on its "power brands", including Hovis bread, Loyd Grossman cooking sauces and Bisto gravy.

"This agreement represents another important step in our strategy to focus on our power brands," Clarke said. "I'm delighted that we have found a buyer such as Mizkan. Our vinegars and sour pickles business and employees will greatly benefit from being part of a global player focused on vinegar and liquid condiments."

Premier said Sarson's and Haywards were the "leaders" in their respective categories. The sale includes speciality vinegar brand Dufrais, which the company said was the "number two brand" in that sector. The brands are "predominantly" manufactured at Premier's site in Middleton and the company said "all employees" at the factory are expected to transfer to Mizkan.

The transaction also includes private-label assets, as well as pickled beetroot and piccalilli lines at Premier's facility in Bury St Edmunds. Premier will continue to manufacture Haywards beetroot and piccalilli for Mizkan at the plant for 12 months.

"We are excited to acquire two strong and iconic brands that have such a deep heritage in the UK. Sarson's and Haywards are beloved by consumers and we look forward to investing in the brands and adding to their legacy. They fit well with our global portfolio, are an excellent strategic fit and provide a solid foundation for growth in the UK," Mizkan CEO Kazuhide Matazaemon Nakano said.