Blog: Premier's latest sale cheers City
Dean Best | 30 October 2012
Premier Foods' latest deal to dispose of a household brand - this time Branston pickle - sent the UK firm's shares soaring today (30 October).
The company announced a GBP93m (US$149.5m) deal with Japanese food group Mizkan - to which it had sold another set of assets, including the Haywards pickled onion brand, earlier this year.
The transaction, which Premier expects to finalise early next year, is the latest the company has completed in the last 18 months or more as it lowers its debt pile and focuses on a select group of brands.
Premier CEO Michael Clarke said the sale would mean it exceeds its target of bringing in GBP330m in proceeds from disposals 20 months before a June 2014 deadline it signed up to under its financing agreements.
Shares in the company, which owns brands including Batchelors soup and Oxo gravy, jumped after the news and were up 6.65% at 108.25p.
Panmure Gordon analyst Graham Jones took a considered view of the sale and of Premier's financial position.
Jones said the deal was worth 1.4x Branston's sales and represented a 7.9x EV/EBITDA multiple for 2011, which, he said, was a "reasonable price" and a "better multiple than previous disposals".
However, he added: "Even after these recent disposals, Premier will remain highly geared and it still has a very large pension deficit which has to be serviced from a smaller cash generative base. For now we stick with our 'hold' recommendation and 90p price target."
Today (23 December) is just-food's last day before closing for Christmas. We'll return, raring to go on Tuesday 3 January - but of course there's been plenty of top-notch content that has gone live in...
The plethora of food manufacturing associations in the UK has been argued by some to be an impediment to the industry coming to a coherent position on the aftermath of Brexit and on what the sector sh...
An update on Amazon's plans for the grocery sector. The usually reticent retailer has this week poured cold water on claims it has plans for 2,000 physical grocery stores....
- just-food 2017 Survey - your thoughts on growth
- 2017 - what will shape the UK food sector?
- Food market in 2017: need-to-know US trends
- Food market in 2017: big foodservice trends
- Could BRF's Turkey move pave way for OneFoods IPO?
- Ferrero insists Nutella not pulled from shelves
- UK's Bakkavor plays down IPO "speculation"
- PepsiCo launches Walkers Mediterranean in UK
- Mondelez plans "selective" UK price hikes
- US targets increased organic production