Greencore has acquired The Sandwich Factory Holdings Limited from Cranswick plc for £15 million (approximately €18 million), in a move that it says will extend its presence in the high growth food-to-go category outside of its current core business with large grocery customers.
The Sandwich Factory produces a range of food-to-go products for distribution in the convenience store and food service channels. Its net revenue from manufactured products in the financial year ended 31 March 2016 was £42 million.
Analysts at Shore Capital have commented on the deal that, ‘We would imagine that scale and capability benefits would yield financial rewards in time for Greencore whilst, as we outline in a separate note, we see Cranswick benefiting from increased corporate focus.’
It adds that Greencore will pay Cranswick the €15 million for The Sandwich Factory in cash funded from debt facilities, and that it forecasts FY2016 net debt of around £305 million for Greencore.
‘With only two months left in Greencore’s financial year, the deal is expected to be earnings neutral by management in FY2016 but the company guides to modest enhancement thereafter. Hence, there may be scope to tickle up FY2017 earnings estimates,’ it noted.
© 2016 - Checkout Magazine by Jenny Whelan
