Boyne Valley Group buys Premier Foods Irish unit

Boyne Valley Group buys Premier Foods' Irish unit

UK food manufacturer Premier Foods plc has signed an agreement to sell its Irish business to The Boyne Valley Group.

Under the EUR41.4m (US$53.9m) deal, Premier will sell its Chivers, Gateaux, McDonnells brands to Boyne Valley, as well as a licence to the Erin brand.

Premier said the sale, which is expected to be complete early next year, represents a further step in its strategy "to focus investment behind its eight power brands" including Mr Kipling and Hovis.

The deal is Premier's latest move to offload parts of its business. Earlier this month, it announced an deal to sell its under-performing Brookes Avana subsidiary to 2 Sisters Food Group for GBP30m (US$46.8m).

Premier CEO Michael Clarke said: "The sale of these Irish brands will enable us to focus on supporting our power brands in line with our overall strategy. Coming hard on the heels of the announcement of the Brookes Avana sale agreement, this underlines our determination to streamline the business to help restore profitable growth quickly."

For the year ended 31 December 2010, the Irish brands generated sales of EUR29.5m and an EBITDA of EUR10m before selling, general, administrative and fixed logistics costs. 

"With additional investment, we believe we can grow these brands further.  They fit well within our existing food portfolio which includes olive oil, relishes, home-baking and honey," Boyne Valley CEO John Harkin said. 

Earlier this week, reports circled that that Irish food and beverage group DCC was nearing a deal to buy Premier's Irish unit.