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".
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
Investors certainly seem keen Greencore's shares rose by 12% on the news.
City diary
Billionaire property developer Donald Trump may have won the US presidential election on the basis that he was fighting on the behalf of the forgotten American masses against the financial and political elites. But at least one member of the financial elite has already profited handsomely from his victory, says "The Dastardly Mr Deeds" in the Daily Mail. James Gorman, chairman and chief executive of Morgan Stanley, is now £2.3m richer after he sold 200,000 of his shares in the bank. Morgan Stanley's share price shot up by 17% in the wake of Trump's victory.
"From Drastic' to Desperate', and sometimes Dreary' we've seen many versions of Tesco's Dave Lewis," says The Daily Telegraph's Ben Marlow. "To that, we can now add Dependable", after the supermarket giant recorded its fastest sales growth in three years. But even after a couple of years of "steady progress", the grocer's share price is still "languishing" below where it was when Lewis took over, "despite an impressive 42% increase this year". Soon the City may be calling for yet another version of Lewis "Daring Dave".
Nutmeg, the digital wealth adviser, announced this week that it has raised a further £30m in funding, led by Hong Kong consultancy Convoy. That's excited the chancellor of the exchequer, Philip Hammond. The deal, he says, "confirms the UK's position as the global fintech capital".
The London Evening Standard's Anthony Hilton isn't quite as impressed as Hammond, however. "Nutmeg is nothing special," he says. It has been "pretty unsuccessful in attracting clients and mildly embarrassing for backers who have already invested more than £50m in it". And as for its financial performance, "it is not so much going from strength to strength as loss to loss, the latest being £9m".
