British pork giant Cranswick (CWK) has bolstered its non-meat credentials with the £43.5m acquisition of UK-based Mediterranean food specialist Katsouris Brothers.
Cranswick has acquired the entire share capital of the Wembley-based business, which supplies private label and Cypressa branded olives, oils, antipasti, cheeses and other vegetarian continental products.
The listed protein specialist already has its own continental foods business, having opened a £27m facility in Bury last year to build its presence in the growing segment. It is more focused on cooked meats, meaning the acquisition of Katsouris represents a major expansion of its non-meat ranges and will bring its ratio closer to 50:50.
Cranswick has committed to keeping Katsouris’ two facilities in Wembley open, employing approximately 250 people. Costas and Louis Constantinou, MD and commercial director respectively, will remain with the business.
CEO Adam Couch said the deal “broadens our offering in a number of fast-growing, plant based, non-meat product categories”.
“The family behind Katsouris Brothers has created long lasting and sustained relationships with suppliers and the business has a strong customer base,” he added.
Analysts at Shore Capital said the deal gave Cranswick a “notable presence in the large, fragmented and diverse London foodservice market” where it currently had relatively low participation.
Broker Panmure Gordon added: “We understand that there is relatively limited customer overlap between Katsouris Brothers and the existing Cranswick continental food business, which should provide plentiful scope for cross-selling.”
For the year ended 30 June 2019 Katsouris Bros had sales of £68m, adjusted EBITDA of £6m and the gross assets of £30m.
Meanwhile, Cranswick said trading in the first quarter of the financial year has been “encouraging”, with sales up 1.5% on strong comparatives in the same period last year.
Far East export revenues were strongly ahead of the corresponding period last year, reflecting increased demand from China following the widespread outbreak of African swine fever in the region.
The UK pig price increased by 10% during the period although the average price across the quarter to June 2019 was still below that in the equivalent period a year earlier.
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