Just a week after shareholders voted to sell 40% of its operations, Northern Foods has revealed it is keen to buy more.

Chief executive Pat O'Driscoll said Northern Foods had made more money than it had expected from the disposal of Fletchers Bakeries, Smiths Flour Mills, Park Cakes and Pork Farms to private equity firm Vision Capital and would now look to invest the proceeds.

"We had a successful disposal of the businesses, which came up above the expected target," she said. "The proceeds were £211m and even after costs we still made £203m.

"Now we're going to look at each of our product ranges and work through what it takes to grow them within the business, but we will also be looking at acquisitions. We've got the cash to be able to look for growth."

It was not surprising that Northern Foods was looking to acquire new businesses, said mergers expert Simon Peacock of Catalyst Corporate Finance. "The only way it can survive is by making acquisitions in 2007," he said. "It needs to make acquisitions because if it flounders its share price will take a hit and it will become a target for acquisition itself. I would imagine Northern Foods is looking at Burtons Foods, although whether it can afford it is another matter. I'd imagine O'Driscoll will be looking at any number of healthy small private companies. This is the year where we see whether she has made the right decision with the disposals and find out whether Northern can turn back into a proper plc."

In a Q3 trading update on Tuesday Northern said excluding businesses sold, growth in underlying sales slowed to 2.8% in the third quarter, while sales rose 3.2% for the year to date.

"We feel it's been a good year but we still have a lot to do," O'Driscoll told The Grocer. "We're positive about the year and we want to build on our successes. Innovation is a big focus for us this year, as well as NPD, along with value-added, and premium and indulgence products."