Disposal (6387T)
December 08 2011 - 10:50AM
UK Regulatory
TIDMPFD
RNS Number : 6387T
Premier Foods plc
08 December 2011
Premier Foods plc ("Premier Foods" or the "Group")
PREMIER FOODS REACHES AGREEMENT TO SELL BROOKES AVANA TO 2
SISTERS FOOD GROUP FOR GBP30 MILLION
Premier Foods today announces that it has signed an agreement
with 2 Sisters Food Group to sell its Brookes Avana business
comprising of RF Brookes chilled foods and Avana Bakeries for a
cash consideration of GBP30 million.
The agreement represents an important step in streamlining the
Group's portfolio following its announcement on 7 October that it
will focus investment behind eight Power Brands and dispose of
selected businesses further enabling it to deleverage the
business.
Commenting on the proposed sale, Michael Clarke, Chief Executive
Officer, Premier Foods, said:
"The sale of Brookes Avana underlines our commitment to focus
the business on growing a smaller number of brands. Brookes Avana
will have a better opportunity to grow with 2 Sisters Food Group
given their focus in the chilled food sector. I wish them every
success in the future."
Ranjit Singh, Chief Executive, 2 Sisters Food Group, said:
"We are delighted to reach agreement on the proposed acquisition
of Brookes Avana. The business has a strong track record in
delivering high quality products for its customers and would
provide a growth platform for 2 Sisters and increased product
diversity to serve every eating occasion.
"This is an excellent strategic fit and, following completion,
we will focus on delivering growth opportunities and enhancing the
performance of the business."
Highlights of the agreement include:
- Sale of the three Brookes Avana sites at Newport (RF Brookes
and Avana Bakeries) and Leicester (RF Brookes). It is intended that
all of the employees will transfer with the business following
appropriate discussions with them and their representatives;
- The consideration of GBP30 million is payable in cash on
completion, subject to a post-completion working capital
adjustment;
- The net sale proceeds will be held to repay bank borrowings,
as required (after estimated disposal costs totalling GBP1.8
million);
- The sale will be made on a cash and debt free basis;
- All necessary consents under Premier Foods' finance facilities
have been received and the transaction is expected to complete by
early 2012;
- Post completion of the sale, there will be a short transition
service agreement covering IT, Procurement and Technical during
which Premier Foods will continue to support 2 Sisters while it
integrates Brookes Avana into its operations; and
- In addition, Premier Foods and 2 Sisters have entered into
manufacturing agreements in relation to certain products currently
produced by the Brookes Avana business.
For the year ended 31 December 2010, Brookes Avana reported a
turnover of GBP203.6 million and a trading loss of (GBP0.1)
million. Before allocated Group and Corporate costs, Trading Profit
for the year ended 31 December 2010 was GBP9.4 million.
As at 31 December 2010, Brookes Avana had net assets of GBP104.1
million, gross assets of GBP147.4 million including intangible
assets of GBP65.2 million.
At the Half Year, ended 25 June 2011, Brookes Avana reported a
trading loss of (GBP13.3) million and at the Q3 IMS, on 7 October,
the Group guided that Brookes Avana trading was likely to be
similar in the second half to that of the first half.
-Ends-
Notes to Editors:
1. The purchaser is Solways Foods Limited, part of 2 Sisters Food Group.
2. Premier Foods is being advised by Stamford Partners and Slaughter and May.
3. The Brookes Avana business is located in three sites (Newport
- RF Brookes and Avana Bakeries and Leicester (RF Brookes) and
employs just over 2,000 people.
Enquiries:
For further information, please contact:
Premier Foods plc 01727 815850
Lisa Attenborough, Group Director of Communications
Richard Godden, Head of Investor Relations
Maitland 020 7379 5151
Tom Buchanan
Brian Hudspith
This information is provided by RNS
The company news service from the London Stock Exchange
END
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