Partner Article

Premier Foods Group sell jellies division for £200m

Premier Foods has confirmed the sale of its jellies business for £200m to U.S Hain Celestial Group in cash and shares.

Robertson’s and Hartley’s sections of the Group have been bought by Hain Celestial which sent the buyer’s shares up by 10% in extended trading hours.

As Britain’s largest food group, household brands such as OXO, Branston and Ambrosia come under Premier Foods umbrella.

Included in the sale of their jam and spreads brands are Robertson’s and Hartley’s jams, Frank Cooper, Keiller, Sun-Pat peanut butter, Gales and the license for Rose’s marmalade.

The deal will be completed with £170m in cash and £30m in shares of Hain Celestial, who have entered into a transitional services agreement with Premier to ensure a smooth transition between the businesses.

Hain Celestial will also manufacture Hartley’s jelly crystals at the current Knighton site for at least 1 year, and will supply Premier Foods with jam as an ingredient under a supply agreement.

Premier Group’s Histon factory, near Cambridge, will be part of the deal due to be completed in October.

The US buyer expects sales to reach around $180m (£113m) before the end of the eight month period up to 30th June.

Proceeds of the deal between the two foods companies will be used to pay down Premier debts, after the Group’s 2007 acquisition of RHM group, who own Hovis and Mr Kipling, brought on pressure from bankers to sell-off some of their brands.

Michael Clarke, CEO of Premier Foods, said: “This divestment is a major step forward in our strategy to simplify the business and focus on our Power Brands.

“Following completion of this sale, we will have raised around £275 million of the £330 million disposal proceeds that we committed to achieving by June 2014. This will represent a 22% reduction in our net debt since the Half Year.

“Our sweet spreads and jellies business was not core to Premier Foods and our employees in this business will benefit from being part of an international company that is committed to investing in, and growing, these categories.”

Hain Celestial suggested they had ambitions to become the UK’s largest healthy foods company.

Irwin D. Simon, the founder, President and CEO of Hain Celestial said: “The acquisition of the Premier Foods brands furthers our goal to expand in the United Kingdom with the addition of ambient grocery products.

“Key to the success will be the experienced workforce and management at the Histon facility who we look forward to working with.”

This was posted in Bdaily's Members' News section by Miranda Dobson .