Greencore Group has acquired Warwickshire-based The Sandwich Factory Holdings Limited (The Sandwich Factory) from sausage-maker Cranswick.
The total consideration will be up to £15m (subject to adjustment post completion in relation to levels of working capital and net debt) and will be funded by existing debt facilities.
The Sandwich Factory operates from a single facility in Atherstone. Warwickshire, where it produces a range of gourmet sandwiches and food-to-go products for distribution in convenience store and foodservice channels. Net revenue from manufactured products in the financial year ended 31 March 2016 was £42m.
City analysts Shore Capital said of the decision to sell the sandwich business: "We have long considered sandwiches as non-core to Cranswick so the disposal comes as no surprise to us."
The purchases will see Greencore extend beyond its current core business with large grocery retailers. The facility will also allow the company to increase its capacity across its food-to-go network and will bring new capabilities in the form of short-run, specialist products.
Greencore’s chief executive, Patrick Coveney, said: “This acquisition makes strong strategic sense for Greencore, given our ongoing focus on the food-to-go market. The Sandwich Factory will extend our reach into customer channels in which we are currently under-represented, notably convenience stores and the travel sector, and will also bring new product types into the Greencore portfolio. We are delighted to be adding more capacity to our manufacturing network and to be welcoming new colleagues to our business.”,
Greencore makes good including sandwiches, cakes, desserts and Yorkshire puddings for the UK convenience food market.
In May Greencore reported an 8.5% growth in operating profit to £43.5m during its H1 period.