Premier Foods has announced it has reached an agreement to sell its Brookes Avana business to Solways Foods, part of 2 Sisters Food Group for a cash consideration of £30m.
Brookes Avana consists of RF Brookes chilled foods and Avana Bakeries, with the sale marking the next step in Premier’s stategy to streamline the group’s portfolio.
Premier announced in October that it would be focusing investment behind eight Power Brands, including Hovis and Mr Kipling, and would dispose of selected businesses “further enabling it to deleverage the business”. Michael Clarke, chief executive officer, Premier Foods, commented: “The sale of Brookes Avana underlines our commitment to focus the business on growing a smaller number of brands. Brookes Avana will have a better opportunity to grow with 2 Sisters Food Group given their focus in the chilled food sector. I wish them every success in the future.”
Ranjit Singh, chief executive, 2 Sisters Food Group, added: “We are delighted to reach agreement on the proposed acquisition of Brookes Avana. The business has a strong track record in delivering high-quality products for its customers and would provide a growth platform for 2 Sisters and increased product diversity to serve every eating occasion.”
He said it was an excellent strategic fit and, following completion, the firm would focus on delivering growth opportunities and enhancing the performance of the business.
The sale includes the three Brookes Avana sites at Newport (RF Brookes and Avana Bakeries) and Leicester (RF Brookes). It is intended that all of the employees – numbering just over 2,000 – will transfer with the business following appropriate discussions with them and their representatives.
In addition, Premier announced it had also entered into manufacturing agreements with 2 Sisters in relation to certain products currently produced by the Brookes Avana business.
For the year ended 31 December 2010, Brookes Avana reported a turnover of £203.6m and a trading loss of (£0.1m). At the half year, ended 25 June 2011, it reported a trading loss of (£13.3m).