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Premier Foods has expanded its presence in the breakfast category with the £34m acquisition of protein brand Fuel10K.
It’s the Bisto and Mr Kipling owner’s second deal in just more than a year, following the £44m takeover of The Spice Tailor in 2022.
Fuel10K will significantly boost the group’s position in the breakfast aisles, building on its launch of Ambrosia porridge pots last year.
Premier noted that Fuel10K was “on-trend” with its range of protein-enriched - including granola, porridge pots, drinks, oat bars and cookies - and also appealed to a predominantly young consumer demographic.
The brand is also rapidly growing, registering double-digit revenue growth over the past three years thanks to distribution across all the big mults, and is the fourth biggest in the UK breakfast category overall.
The £34m price tag represented a 1.6x sales multiple on the projected revenues of £21m for the year ended 31 March 2024.
Premier will pay Fuel10K £29.6m upfront - funded through its cash reserves - with a minimum of a further £4m payable in the 2026/27 financial year and up to a maxiumum of £55m dependent on hitting certain growth targets.
With a pre-tax profit of £500k in the year ended 31 March 2023, Fuel10K will also be earnings accretive for Premier in the first full year following the takeover.
Premier said in a statement to the London Stock Exchange this morning that it expected to unlock “significant future value through leveraging its proven branded growth model”.
CEO Alex Whitehouse added the deal followed on from the “successful integration” of The Spice Tailor, with Premier increasing revenue and profit through the application of its model.
“Fuel10K provides us with an ideal platform to accelerate our expansion into the breakfast category, building on our recent successful launch of Ambrosia porridge pots.
“Possessing a differentiated category position, with its protein-enriched product range and appealing to a younger demographic, we expect to deliver significant further profitable growth of Fuel10K through the deployment of our successful branded growth model.”
Fuel10K co-founder Barney Mauleverer said: “We are very excited to be passing the reigns on to the owner of such a great stable of UK brands.
“Having built the foundations from start-up, the Fuel10K brand is now primed to accelerate into the future and achieve even more great things. I could not think of a better custodian of our brand than Premier Foods to entrust what we have begun and make the most of such a great opportunity.”
Shares in Premier Foods increased 1.2% to 114.6p as markets opened this morning.
Financial services firm Alantra advised Premier Foods on the deal.
Charles Lanceley, head of UK food & beverage at the firm, said, “Fuel10K has quickly become one of the most disruptive brands in the breakfast category due to its range of innovative protein enriched products and loyal following of consumers. Acquiring Fuel10K provides Premier Foods with a great platform to accelerate its growth in the breakfast meal occasion.”
Morning update
Cake Box has appointed non-executive director Martin Blair as its chairman following a recruitment process carried out over recent months.
Blair will succeed Nilesh Sachdev at the dessert shop chain on 31 October 2023.
The group said Blair had a ” deep knowledge” of Cake Box and its strategy, having sat on the board as an non-executive and chairman of the audit committee since the Company was admitted to trading on the AIM market of the London Stock Exchange in June 2018.
The board has also appointed Adam Batty as the senior independent director and kicked off a new hunt for a non-executive director to chair the audit committee.
CEO Sukh Chamdal said: “On behalf of the board, I would like to thank Neil for his contribution to Cake Box. He has been instrumental in the delivery of Cake Box’s significant growth since our IPO more than five years ago, with the store estate almost tripling during his tenure.
“Neil had a particular focus on improving diversity in our business, helping to significantly increase the number of female franchisees to over 40 today. We wish him all the best for the future.
“Following a thorough process conducted in recent months, I am also delighted that Martin Blair is stepping up to chair the Cake Box board. He has a deep understanding of our business and was the standout candidate among a strong field to help guide our business through the next stage of our growth.”
Blair added: “I am honoured to be taking up the role of chair of Cake Box. As outlined at our recent capital markets event, there are many exciting growth opportunities ahead for the business and I look forward to working with the board and executive management team to help us to capitalise on these. With an experienced leadership team and ambitious strategy, I am confident that the group will continue to deliver growth for all stakeholders.”
Dutch supermarket group Ahold Delhaize has acquired Romanian grocery retailer Profi Rom Food from MidEuropa for €1.3bn.
It said the deal provided “a strong format fit and complementary customer proposition” to its local Mega Image brand in the Romanian market.
The group added that Romania was an “attractive market experiencing continued growth in public wealth and spending power”.
Profi is a traditional grocery retailer in Romania, operating 1,654 stores in the country. In the 12 months ending June 2023, the company generated €2.5bn in sales.
The acquisition will more than double the size of Ahold Delhaize’s existing Romanian business, which operates under the Mega Image brand and has 969 stores, predominantly in urban areas.
Ahold Delhaize CEO Frans Muller said: “I am very excited to welcome Profi into the Ahold Delhaize family.
“We have followed the company’s trajectory for a while now and admire what the Profi team has been able to achieve. I strongly believe that Profi has an exciting growth pathway ahead, and look forward to partnering with the team to further solidify our presence in Central and Southern Europe.”
The FTSE 100 opened up 0.8% to 7,347pts this morning.
Early risers include Glanbia, up 4.5% to €15, Hilton Food Group, up 4.3% to 677.9p, and Naked Wines, up 3.3% to 533p.
Losers so far include Virgin Wines UK, down 4.3% to 33.5p.
This week in the City
The big news of the week comes on Thursday in the form of interims at Sainsbury’s.
Coke bottler Coca-Cola HBC issues its Q3 results tomorrow, alongside brewing giants AB InBev and Carlsberg, while embattled Real Good Food holds its AGM. The BRC also releases its latest shop price index.
High street bellwether Next puts out its Q3 update on Wednesday, as does packaging firm Smurfit Kappa, with Mondelez, Yum! Brands and DoorDash also due to report in the US.
GSK consumer health spin-off Haleon publishes its latest quarterly figures on Thursday, with Kellogg’s and Starbucks doing the same in the US.
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