UK food manufacturer Cranswick has announced it has acquired Katsouris Brothers, a local Mediterranean food products business, for GBP43.5m (US$53.7m).

That price could increase depending on the purchased company’s future performance.

Katsouris Brothers, which uses the Cypressa brand name, is a processor and multi-channel supplier of Continental and Mediterranean food products. The business operates from two facilities in Wembley in north west London and employs around 250 people.

Costas and Louis Constantinou, Katsouris’ managing director and commercial director respectively, will remain with the business.

Katsouris Brothers’ revenue for the year ended 30 June was GBP68m and adjusted EBITDA was GBP6m.

Cranswick, a meat products-to-sandwiches supplier, said the transaction is expected to be modestly earnings-enhancing in the current financial year.

It said the acquisition will be funded from its existing debt facilities. A further deferred contingent consideration of up to GBP7m may become payable dependent on the future performance of the purchased business in the 14 month period to 30 September 2020.

Adam Couch, CEO of Cranswick, said: “This acquisition strengthens our existing continental products business and broadens our offering in a number of fast-growing, plant based, non-meat product categories.

“The family behind Katsouris Brothers has created long lasting and sustained relationships with suppliers and the business has a strong customer base. We look forward to building on this and continuing to invest in the facilities and the team, over the years ahead.”

News of the acquisition came as Cranswick provided a Q1 trading update for the three months to 30 June.

It said trading in the first quarter of the financial year has been encouraging with revenue 1.5% higher than the same period last year.

Cranswick revealed it has seen increased demand from China following the outbreak of African swine fever in the region.

It said investment in its new GBP75m poultry processing facility at Eye in Suffolk in eastern England, which will more than double existing capacity, is progressing to plan.

Cranswick said the facility is “being fast-tracked” to support the anchor customer for the new site, the ‘big four’ UK supermarket group Morrisons.

The company has previously said the plant would be ready for use by the end of 2019.