Food company Premier Foods has today (Monday) announced that it has agreed to buy Marlow Foods, the owner of meat alternative brand Quorn, from Montagu Private Equity for £172m (US$312m).

The consideration will be satisfied through a cash payment and completion is expected to take place later today, the company said 

In the year to 31 December 2004, Quorn sales were £79m (representing 100% of the sales of Marlow Foods).  Profit before tax was £4.6m. 

Since UK national launch in 1994, Quorn has grown to become the UK's largest  meat alternative brand with retail sales of £95m, Premier Foods said.  Over the last five years, Quorn has achieved an average annual sales growth rate of over 7%.  From its initial launch targeting the vegetarian consumer, Quorn has successfully increased its appeal amongst healthy eaters and those looking to reduce meat consumption.  Marlow Foods now offers a wide choice of Quorn branded products ranging from burgers, sausages and escalopes through to cottage pies and lasagne.

Quorn provides Premier with a category-leading established brand with high growth prospects and increases Premier's branded sales mix from 57% to 61%. The UK accounts for 75% of Quorn sales and approximately 21% of sales are exported to Sweden, Switzerland, Belgium and Holland where Quorn holds category-leading positions.  In addition, Quorn is the number two meat alternative brand in the natural foods sector in the USA.

Quorn has over a 60% share of the £155m meat alternative category in the UK and a 15% share of the broader £640m meat free category.  With approximately 70% of households seeking to eat more healthily, Quorn's excellent health credentials mean it is strongly aligned to consumer trends.

Marlow Foods will continue to be run by its existing management team, led by managing director, Nick Hughes, and will benefit from access to Premier's sourcing and routes to market and its more developed presence in the food service channel.  Premier also plans to increase brand investment to maximise growth potential.  Premier will operate Marlow as a stand-alone unit, however the acquisition is still expected to generate purchasing and administration synergies of £4m per annum by 2008.

"This is a fantastic acquisition for Premier Foods," said Robert Schofield, chief executive of Premier Foods. "Quorn's strong brand recognition and leading category positions immediately provide Premier with a very strong branded position in an exciting growth market.  Quorn is ideally placed to benefit from the increasing demand for healthy eating and the combination with Premier should accelerate its growth."

 "Quorn fulfils all our acquisition criteria," he said. "It enhances our branded mix, it is UK focussed and meets all our financial hurdles.  As well as being by far the largest brand in its category, it will be the largest brand in our portfolio."