Premier Foods plc PFD Disposal

  Premier Foods plc (PFD) - Disposal

RNS Number : 0800H
Premier Foods plc
06 July 2012
 



6 July 2012

 

                              Premier Foods plc
                       ("Premier Foods" or the "Group")

                                       

PREMIER FOODS SELLS ELEPHANT ATTA ETHNIC FLOUR BUSINESS TO ASSOCIATED BRITISH
                            FOODS FOR £34 MILLION

Premier Foods today announces that it has sold its Elephant Atta ethnic flour
business to Westmill Foods, a subsidiary of Associated British Foods plc
("ABF"), for a cash consideration of £34 million.

 

The agreement represents another step in the Group's strategy to prioritise
investment behind its Power Brands and divest selected, non-core businesses.

 

Elephant Atta is the UK's leading brand of ethnic flour. The sale includes the
Elephant Atta, Elephant Chakki Gold and Fassal brands predominantly
manufactured and packed at the Group's mill in Southampton.  

 

Commenting on the sale, Michael Clarke, Chief Executive Officer, Premier Foods
said:

 

"We are continuing to deliver on our growth strategies, growing our Power
Brands, divesting selected, non-core businesses and reducing costs on track
with our plans. The Elephant Atta brands are great brands that I'm sure will
benefit from being part of Westmill Foods." 

 

 

Sale Highlights

 

·   The transaction included the distribution, sales, and  marketing of ethnic
flours under the Elephant Atta, Elephant Chakki Gold and Fassal brands;

·   A consideration of £34 million was paid in cash on completion;

·   The sale was made on a cash and debt-free basis;

·   The  proceeds of the sale will be used to pay down debt;

·   All  necessary  consents  under Premier  Foods'  finance  facilities  were 
received prior to the sale;

·   Premier Foods and ABF have entered into a co-packing agreement pursuant to
which Premier Foods will continue to  manufacture the Elephant Atta brands  at 
its Southampton mill;   

·    Premier  Foods   and  ABF  have   entered  into   transitional   services 
arrangements to facilitate the smooth transfer of the business; and

·   One employee has transferred to Westmill Foods as part of the sale.

 

For the year ended 31 December 2011, the Elephant Atta business had reported
revenues of £17.8 million and an EBITDA (before selling, general and
administrative costs) of £6.4 million. The value of the transaction represents
approximately 1.9x revenues. The gross assets of the Elephant Atta business as
at 31 December 2011 were £3 million.  As cumulative divestments take place,
the Group will continue to challenge its overhead cost base to mitigate the
impact of this and other transactions on earnings.

 

 

 

                                    -Ends-

 

For further information, please contact:

 

Premier Foods plc                                                            
01727 815 850

 

Mark Moran, Chief Financial Officer

Lisa Attenborough, Director of Communications

 

Maitland                                                       
                        020 7379 5151

 

Tom Buchanan

Brian Hudspith

 

 

Notes to editors:

 

1.    For further information on Premier Foods, see www.premierfoods.co.uk 

 

2.    Associated British Foods (www.abf.co.uk) is a diversified international
food, ingredients and retail group with global sales of £11.1bn and 102,000
employees.  It is listed on the London Stock Exchange with a market
capitalisation of over £10.2bn. It operates in 46 countries with significant
businesses outside Europe in southern Africa, the US, China and Australia. 
Its aim is to achieve strong, sustainable positions in markets that offer
potential for profitable growth.  It strives to achieve this through a
combination of growth of existing businesses, the acquisition of complementary
new businesses and achievement of high levels of operating efficiency.  

 

3.    Westmill Foods is a subsidiary of ABF and a leading specialist food
company in the UK and Europe, serving the chefs and owners of Chinese and
Indian restaurants and takeaways, as well as a diverse range of Indian,
Pakistani, Bangladeshi, Chinese, African and Caribbean consumers.  Its product
range includes high quality rice, spices, sauces, oils, flour and noodles,
which it sells to ethnic wholesalers as well as cash and carry, mainstream
foodservice and the grocery multiples.

 

4.   Premier Foods is being advised by McQueen.

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
DISEQLBBLDFEBBE -0- Jul/06/2012 06:00 GMT