The new joint venture, to be named Knighton Foods, will combine dry powders manufacturing capabilities and assets from both parties at the Knighton site, enabling cost synergies and scale efficiencies from greater utilisation of the facility.
The agreement will also enable the transfer of two production lines from Knighton to Premier Foods’ manufacturing plant in Ashford, Kent, resulting in significant further efficiencies in Premier Foods’ broader grocery manufacturing infrastructure.
Under the terms of the agreement, Specialty Powders will contribute its wholly owned businesses, Phoenix Foods and Agglomeration Technology, to the joint venture, in consideration for a 51% controlling stake and a loan from the joint venture to repay its existing debt.
Premier Foods will contribute the Knighton site and assets (other than the two production lines that will be transferred to Premier Foods’ site in Ashford) to the joint venture, together with its private label and business-to-business sales of powdered beverages and desserts, in consideration for a 49% stake in the joint venture and a promissory note of a principal amount equal to the loan to Specialty Powders.
Premier Foods will retain the substantial majority of its branded sales currently made at Knighton, including under the Bird’s, Angel Delight and Marvel brands, which will be manufactured either at its Ashford site or at Knighton by the joint venture under a co-packing arrangement.
Source: Premier Foods
© FoodBev Media Ltd 2024