Dairycrest to sell French spreads business and focus on UK
Dairy Crest Group has received a binding offer from Montagu Private Equity for the proposed disposal of the entire issued share capital of St Hubert following a strategic review of the business.
Dairy Crest Group has received a binding offer from Montagu Private Equity for the proposed disposal of the entire issued share capital of St Hubert following a strategic review of the business.
Montagu is offering a consideration of €430m (£344m) in cash for St Hubert, which Dairy Crest purchased in 2007 for €370m at a time when it planned to make further acquisitions in Continental Europe. Given that this strategy was unsuccessful, Dairy Crest believe the sale offers the best option for shareholders.
Low fat spreads business St Hubert is the second largest participant with a market share of approximately 39% by value as at March 2012.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
If the sale goes ahead, the proceeds will initially be used to reduce net debt.
For the year ended March 31st 2012, St Hubert generated EBITDA of €48.1m (£41.52m) and its gross assets were €169m (£141m).
In a statement, the company said: "We are delighted to have agreed in principle the proposed disposal of St Hubert, at a price which reflects the excellent progress the business has made under our ownership.
"Following the transaction, Dairy Crest will remain a broadly based dairy business entirely focused on the UK with strong brands including Cathedral City, Country Life, Clover and Frijj. It intends to continue to build on the success of its UK branded foods business and restore its Dairies business to a satisfactory level of profitability in the medium term.
"Over the coming months, from a strengthened financial position, Dairy Crest will consider a range of options taking into account the interests of all stakeholders."
The company said it expects the sale to be completed by September 30th, at which time the agreement expires.
NR
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Christmas at Chatsworth: review of The Cavendish Hotel at Baslow
MoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
By Dr Matthew Partridge Published
-
Tycoon Truong My Lan on death row over world’s biggest bank fraud
Property tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
By Jane Lewis Published