GREENCORE, THE convenience food company being stalked by developer Liam Carroll and Icelandic food group Bakkavör, has spent $44 million (€ 28.3 million) on its maiden purchase in the North American chilled convenience food market.
New England-based Home Made Brand Foods supplies prepared meals and salads, sandwiches and quiche to customers including Ahold-owned Stop & Shop, Delhaize-owned Hannaford and Publix on the eastern seaboard of the United States.
Dublin-based Greencore will pay an additional $10 million (€6.4 million) depending upon Home Made Brand Food's financial performance this year.
The company, which expects the purchase to add "modestly" to group earnings per share from 2009 onwards, said the purchase was a culmination of a "detailed business development effort" in the US chilled food market in the last two years.
It plans to accelerate Home Made Brand Food's existing growth plans using relationships cultivated with regional and national retailers in the US, and potential brand licensers, the company said in a statement yesterday.
Home Made Brand Food's existing manufacturing facilities are thought to be capable of ramping up existing production from $40 million (€ 25.7 million) currently to $100 million (€ 64.4 million).
Greencore chief executive Patrick Coveney said the company was "excited by both the significant recent increase in the level of retailer investment in chilled food categories and by the positive consumer response to these initiatives".
Liam Igoe, analyst at stockbrokers Goodbody, praised the "significant strategic acquisition" in a sector in the "early stages of development" in the US, while noting Home Made Brand Foods had a solid record of profits growth.
He said: "We expect it is aware of where opportunities lie within the larger retailers.
"Combined with its UK-based knowledge of chilled foods, Greencore should be able to add value to this business over the next 12-18 months."
Analysts at NCB Stockbrokers said the acquisition represented a "relatively low-risk" entry into the large US chilled foods market, enabling Greencore to diversify away from the UK, where it is the largest supplier of ready-made sandwiches.
