Icelandic food group Bakkavör has announced that it has acquired Hitchen Foods for £44m (US$76.8m).
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Due diligence has been completed and the acquisition price has been paid, the company said.
Hitchen Foods is a manufacturer of fresh cut vegetables and convenience salads and sells predominantly to the major UK retailers. For the current financial year, Hitchen Foods’ turnover is expected to total around £48m.
Hitchen Foods will be consolidated into Bakkavör’s accounts from the day of the acquisition and will be reflected in the group’s fourth quarter 2005 financial results. The transaction will not have a material effect on Bakkavör’s financial results until 2006.
“The primary strategic reason to acquire Hitchen Foods is to enable Bakkavör Group to gain a significant foothold in the fresh cut vegetable market, which has grown by 80% since the year 2000 and is forecast to continue to grow well, given the UK consumers’ demand for freshly prepared food. In addition, the acquisition strengthens Bakkavör Group’s relationship with key customers. The outlook for further growth is promising and there is potential for future expansion at Hitchen Foods’ current site,” the company said.
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