Greencore plans to sell its soups and sauces business in the UK city of Bristol to The Compleat Food Group to satisfy a regulatory hurdle in its takeover of Bakkavor.
The Compleat Food Group has emerged as the buyer of the Bristol site and business after Dublin-headquartered Greencore revealed this month that it would look to sell the facility to get the Bakkavor deal over the line with the Competition and Markets Authority (CMA).
A spokesperson for London-listed Greencore confirmed the deal with The Compleat Food Group is for the entire Bristol soups and sauces business as a going concern, including 300 workers employed at the plant.
“The disposal is subject to formal CMA approval of the undertaking in lieu following completion of a statutory public consultation process,” Greencore said today (18 November) in a stock exchange filing, without disclosing the financial terms.
It reiterated comments made earlier this month that the Bristol operation generated around £47m ($61.7m) in revenue in the year to 26 September, equating to about 1% of Greencore and Bakkavor combined.
The Compleat Food Group confirmed the deal for the Bristol site in a statement provided to Just Food, repeating Greencore’s observation that the CMA now needs to give the proposed purchase the greenlight.
In another development from The Compleat Food Group, it emerged last week that the acquisitive UK business had purchased the Julienne Bruno dairy-free brand after the company went into administration.
Meanwhile, Greencore added today it is optimistic of completing the Bakkavor takeover on target “early” in the new year.
While the merger with Bakkavor has been in the pipeline since at least March, the CMA flagged in October a potential competition conflict in own-label soups and sauces but did not have similar concerns for ready meals and salads.
Selling the Bristol plant was a remedy proposed by Greencore to prevent the CMA progressing to a Phase-two investigation of the takeover having concluded its Phase-one assessment.
Earlier this month, the regulator said it was “proposing to accept remedies offered” by Greencore.
In a separate announcement today, Greencore issued its full-year results.
Revenue in the 52 weeks to 26 September rose 7.7% to £1.95bn, while profit before tax climbed 29.3% to £79.5m.
Elsewhere, adjusted EBITDA increased 17.9% to £181.2m, and adjusted operating profit was up 28.9% at £125.7m.
Adjusted EPS surged 46.5% to 18.6 pence.
Greencore said underlying volume/mix grew 2.8% with 2% “impacts” from inflation and pricing.
Like UK-based Bakkavor, Greencore operates in food-to-go and convenience products supplied to major supermarkets such as Tesco, Sainsbury’s, Asda, Waitrose and Marks & Spencer.
Post the takeover, Greencore shareholders will own around 59.8% of the new company, with Bakkavor investors holding the remainder.
Greencore generated £1.34bn in revenue from food-to-go categories, up 7.2% from the previous 12 months. Convenience revenues climbed 8.3% to £609.2m.
Food-to-go includes sandwiches, salads, sushi and chilled snacks. Convenience categories feature chilled ready meals, chilled soups and sauces, pickles and frozen Yorkshire Puddings.
