The deal comes soon after Brookes Avana lost a lucrative pie contract with retailer Marks And Spencer (M&S) and at a time when Premier is looking to clear debts of over €1bn.
Asked whether Brookes Avana was offloaded at a discounted rate given its assets and turnover in recent years, Lisa Attenborough, group director of communications at Premier Foods told BakeryAndSnacks.com: “It’s a fair price and right for us.”
She said that the group’s branded sales would rise around 7% once the Brookes Avana was completed.
Brookes Avana reported turnover of €238.7m in 2010 and had net assets of €122m million and gross assets of £147.4 million, including intangible assets of €172.8m
Lost M&S contract
In October Brookes Avana reported that it had suffered a trading loss of €15.5m in the third quarter, largely as a result of a failed pie contact with M&S.
M&S took the decision earlier this year to remove a large pie contract it held with Brookes Avana’s plant in Leicester.
“It had a significant impact on us and we had to make a number of redundancies,” said Attenborough.
She added that more redundancies were planned for next year as a direct result of the failed pie contract.
Power brands strategy
On 7 October, Permier’s new CEO Michael Clarke announced that the company was to focus on eight power brands: Ambrosia, Batchelor’s, Bisto, Hovis, Loyd Grossman, Mr Kipling, Sharwood’s and Oxo.
Attenborough confirmed that the company was still looking to sell “some selected businesses” outside the core brands.
Outside the eight core businesses and potentially up for sale are Hayward’s pickles, Sunpat peanut butter Angel Delight, Paxo stuffing, Branston pickle and Hartley's jams.
Speaking to our sister site Foodmanfacture.co.uk last month, Clive Black, an analyst at Shore Capital said that Premier’s substantial debt meant “all of Premier Foods is effectively for sale”.
2 Sisters Food Group is a UK-based company with 32 domestic manufacturing and further plants in Holland and Poland. Its recognisable brands include Goodfella’s pizzas and Fox’s biscuits
It currently has around 16,000 employees and has estimated that its annual sales will reach over €2.3bn following its acquisition of Northern Foods in April this year.