Greencore Group has announced that it has sold off its remaining UK bread activities, which trade as Rathbones Bakeries, to Finedon Mill for €30m. Rathbones is a private label bakery supplier operating eight bakeries in England and Wales.
Greencore will use the net proceeds from this transaction to reduce its indebtedness and to support further investment in its growing convenience food categories.
Under the terms of the deal Greencore will receive total consideration of €30m, €18.5m paid up front and deferred consideration of €4.6m to be paid in installments, with the balance due on 1 April 2009.
Previously Greencore sold its Milton Keynes bakery for €17m in May 2002. In total, Greencore will have realised €47m from the exit from its UK bread business, which lost €0.4m before taxation and goodwill amortisation in the year ended 26 September 2003 on turnover of €102.8m.
Greencore’s Chief Executive, David Dilger, said: “the disposal of Rathbones completes the exit from the bread market in the UK, a positive development for the Group both commercially and financially. This further sharpens the focus of resources on our convenience food categories which have strong growth prospects and leading market positions”