UK food producer Premier Foods has announced that it has reached agreement to acquire Bird's Custard, Angel Delight and associated brands from US food giant Kraft Foods for £70m (US$134.2m).

Premier Foods said the Kraft brands are complementary to its existing desserts business, which includes Ambrosia custard and milk puddings and Rowntree's jelly.

In the year ended 14 December 2003 sales for the brands being acquired were £37m, with profit before central administrative costs of £9.9m.  Net assets at the time of completion are expected to be £5m.

Premier said it is acquiring the brand rights, associated intellectual property, stock and packaging machinery. Production and packing will be integrated into Premier's existing manufacturing facility at Knighton in Staffordshire during 2005.

"The Bird's business with its high brand recognition is a perfect fit with our Ambrosia and other desserts brands. It will extend our product range in the desserts category and enhance our position as one of the UK's leading suppliers of ambient grocery products," said Robert Schofield, CEO of Premier Foods.

"The acquisition is expected to be earnings and margin enhancing in the first full year of ownership and meets the acquisition criteria we outlined at the time of our IPO," he added.

Premier's existing brands include Branston pickles, Loyd Grossman cooking sauces, Typhoo teas, Crosse & Blackwell convenience foods, Gale's honey and lemon curd, Smash instant mashed potato and Sun-Pat peanut butter.