Greencore, the London-listed, Ireland-based convenience-food producer that makes more than half of the sandwiches sold on Britain's high streets, has agreed to buy US-based Peacock Foods for $748m. The move will quadruple the value of its sales in the US, say Scheherazade Daneshkhu and Lauren Fedor in the FT.
The deal "will transform our US business and add significant scale to our operations", said Patrick Coveney, Greencore's chief executive. The US currently accounts for just 15% of Greencore's sales, with Starbucks and 7-Eleven its two biggest customers. The deal will raise that share to 45%. Peacock makes frozen breakfast sandwiches and fresh prepacked food to go, supplying names such as Kraft Heinz and Dole. It made revenues of $993m in the 12 months to 25 September.
It is Greencore's second acquisition this year and by far its biggest to date, dwarfing the £113m purchase of UK sandwich maker Uniq in the summer. Talks began in March, says Ciarn Hancock in The Irish Times, with an "outline deal" agreed in June. Then the UK voted to leave the EU and sterling collapsed, which added 20% to the price. But "this was balanced out by a similar percentage increase in the earnings that will flow back to the group".
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Investors certainly seem keen Greencore's shares rose by 12% on the news.
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