Golden Vale is expanding its cheese business in Britain with the acquisition of the Luton-based manufacturer of cheese products, Dairyborn, for an initial payment of £9.7 million (€12.3 million).

The consideration also includes a profits-related deferred payment of £2.3 million which is based on profits in the year to the end of December 1999. Golden Vale is paying for Dairyborn in a combination of cash and loan notes, and the acquisition will have a negligible impact on the group's balance sheet.

Dairyborn operates from a modern plant in Luton and employs 90 people in the manufacture of natural cheese products for ready meal manufacturers, convenience food producers and food service customers in Britain. The company produces more than 250 types of cheese product, including grated, sliced and diced cheese, cheese shapes, liquid and creamed cheeses and toppings.

Golden Vale's chief executive, Mr Jim Murphy, said the addition of Dairyborn's natural cheese solutions business will complement Golden Vale's existing processed cheese business where the group is a major supplier of cheese slices to the fast food industry.

"The indicators for the convenience foods market show continued growth. Specifically, food manufacturers are increasingly demanding new food concepts, which improve production efficiencies and guarantee quality.

"Dairyborn has a proven ability to respond to customer needs by developing new and innovative high quality product solutions."

Dairyborn had sales of £16 million (€20.4 million) and pre-tax profits of £1.26 million (€16 million in the year to the end of September 1998. Net assets acquired total £1.33 million (€1.7 million).