Irish food-to-go firm Greencore to sell US business for €927m

Irish food-to-go firm Greencore to sell US business for €927m
Patrick Coveney

Irish food-to-go supplier Greencore has clinched a deal to sell its entire US business for £817m (€927m).

The sandwich-maker said the division was being snapped up by American snacks company Hearthside Food Solutions on a cash and debt-free basis.

Greencore will hand the bulk of the proceeds - around £509m (€577m) in cash - to shareholders via a special dividend "as soon as practicable" once the deal is completed.

A further £293m (€332m) will "support a strengthened balance sheet", by helping to pay down debts.

Chief executive Patrick Coveney said: "We believe that the proposed sale of our US operation represents a compelling and immediate realisation of value for Greencore's shareholders.

We have always had a firm conviction on the underlying value and growth prospects of our US business and believe that this offer fully reflects that.

The company said the deal will still have a "leading position in the UK market" once its US business is sold.

"Looking ahead, we are confident that we can deliver further growth and returns in the dynamic UK market," Mr Coveney said.

"The proposed transaction would enhance our strategic and financial flexibility, which would allow us to build on our industry-leading position in our core UK market whilst also taking advantage of emerging organic and inorganic growth opportunities," he added.

The sale is expected to be completed by late November.

Dublin-based Greencore is a major supplier of food-to-go products including prepared meals, soups and sauces, quiches and frozen Yorkshire puddings.

It boasts a workforce of around 14,500 staff.

Greencore said in the stock market announcement that it till expects to report adjusted earnings per share of between 14.7p and 15.7p for full-year 2018.

Acquirer Hearthside has its headquarters in Illinios, and is one of the largest manufacturers and suppliers of snack products to major consumer goods companies in the US.

It has grown to 25 sites across the UK and the Netherlands since being formed in 2009, and was recently acquired by a group of investors managed by Charlesbank Capital Partners.

- PA

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