Irish-based food and agribusiness company Greencore has announced a number of initiatives it has undertaken during the last two months aimed at developing the business.
The initiatives include the acquisition of a UK premium sandwich business, the disposal of the group’s underperforming UK pizza business and the disposal of a non-core meat products business.
Greencore said it has extended its number one market position in the growing UK sandwich category through the acquisition of Oldfields for a consideration of €17.3m (US$20.7m). Oldfields is the leading producer of premium sandwiches and paninis in the UK coffee bar sector, with annual output in excess of 25 million sandwiches.
The group said it has sold its UK pizza business to Pizza Canadian (a newly formed company established by members of the existing management team) for a nominal consideration. Greencore Pizza was involved in the manufacture of both topped pizza and pizza crusts, primarily for the retail multiple market.
Notwithstanding the operational improvement over the past 12 months, Greencore said this business has consistently failed to deliver the performance or returns that it demands.
Greencore has also sold a small non-core food business, Feldhues, to O.N. Nederland, a Netherlands-based private investment group for a consideration of €10m. Feldhues produces a range of deli-style meat products and has operations in Metelen, Germany, and in Monaghan, Ireland.
“These developments represent important steps in the evolution of the group’s convenience food portfolio. We are especially excited about Oldfields, which will accelerate our move to the premium end of the market and increase our presence in ‘alternative channels’. Indeed, this move represents something of a watershed for Greencore, it being our first acquisition since Hazlewood in early 2001,” said CEO David Dilger.
“Our decision to exit the UK pizza business, while not made lightly, reflects the determination of the group to maintain rigorous financial discipline. Taken together, these developments clearly signal our commitment to rebalance the UK portfolio towards categories where we can sustain strong leadership positions, satisfy growing consumer needs and deliver attractive returns on capital,” he added.