Greencore USA makes products such as sandwiches, meal kits and salads.
Hearthside Food Solutions has acquired the US business of Greencore for $1.08 billion in a move to boost its convenience food offer.
Greencore USA operates 13 locations across North America, with 3,500 employees, and in 2017 it recorded revenues of $1.4 billion. The business makes products such as sandwiches, meal kits and salads. The acquisition expands Hearthside’s network to 38 production facilities in the US and Europe.
Hearthside was itself acquired in May 2018 by Charlesbank Capital Partners and Partners Group.
Ireland’s Greencore said that after completion of the deal, it will focus on growth in the UK. It aims to execute a number of value-creating initiatives in the UK and extend its position in attractive categories and formats within the structurally growing convenience food market.
Earlier this year, the company’s UK cakes and desserts business was acquired by Bright Blue Foods and it also shut its facility in Evercreech, Somerset.
Greencore CEO 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.
“Looking ahead, we are confident that we can deliver further growth and returns in the dynamic UK market. 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.”
Hearthside CEO Rich Scalise said: “Consumer choice is driving growth in frozen, refrigerated and fresh sandwiches/entrees, where Greencore USA is a recognised leader. Leading brands are expanding into these categories and are seeking additional value chain services.
“The acquisition of Greencore USA will expand our production, innovation, and R&D capabilities across these categories.”
Chris Russell, managing director of Partners Group, added: “The synergies and complementary strengths of Hearthside and Greencore USA are impressive. Both serve the world’s premier food companies, and both are known for and committed to lean, world-class manufacturing, setting high standards for quality, safety, and speed-to-market.
“Both companies are also committed to innovation and exemplary customer service, possessing complementary category expertise and capabilities. The combination of the two companies will generate exciting new product and service opportunities for their customers.”
Greencore expects the deal to be completed by the end of November 2018.
© FoodBev Media Ltd 2019