Tue, 25 Jan 2011 | DIVISION SALE
Premier Foods is in talks to sell its canning operations in a move which could raise up to £220 million.
Britain’s biggest food manufacturer sold off its Quorn and Cauldron brands to private equity buyers in a deal worth £205 million only days ago. The deal saw the transferral of three UK manufacturing facilities, with nearly 595 employees to Exponent Private Equity and Intermediate Capital Group.
The disposals are part of a strategy to reduce Premier’s debts, and off-loading the canning business could reduce borrowings to below £1 billion. The group owes an amount in the region of £1.2 billion to its creditors.
Robert Schofield, Premier Foods’ chief executive since 2002, said the sale was part of a bid to make the business more attractive to investors.
An acquisition spree in the early part of Schofield’s tenure at the firm has seen Premier’s share plummet down to 10 per cent of its value in 2007, when it was almost £3 per share.
Quorn was acquired in 2005 for £172 million, Premier then went on to buy another vegetarian food brand Cauldron for £272 million. The spree also included the purchase of Campbell’s Soup in the UK and Ireland.
Premier Foods, whose other brands include Sharwoods, Hovis and Branston Pickle, may even make further disposals, it has been reported.
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