Greencore expected to buy more after €61m UK deal

Greencore is expected to make further bolt-on acquisitions in the UK following its £56m (€61.5m) purchase of prepared salads maker Freshtime.

The Irish-based convenience food group said the purchase will extend its presence in the UK food-to-go sector, in terms of product offering and manufacturing capacity.

The transaction is being funded from Greencore's existing debt facilities and will be neutral to earnings in its current financial year and "modestly" earnings enhancing in the following year.

"Given market fragmentation and a strong balance sheet, we expect bolt-ons to become central to Greencore's capital allocation playbook," Davy analysts said.

Earlier this year, Greencore chief Patrick Coveney said the sandwich-making group would likely undertake "quite a bit" of acquisition activity in the UK over the next three-to-five years as it looks to consolidate after its unexpected exit from the US in 2018.

However, he said Greencore wouldn't be targeting large-scale takeovers like its €125m takeover of rival Uniq in 2011.