Premier Foods has continued its mid-market M&A strategy as the group snapped up Merchant Gourmet for £48m, bolstering the Mr Kipling owner’s health credentials in the process.
It follows CEO Alex Whitehouse returning the once-troubled supplier to the acquisition trail in 2022 with the takeover of The Spice Tailor for £44m and the £34m deal for Fuel 10K in 2023.
Premier said Merchant Gourmet was “highly complementary” to its portfolio and aligned to the acquisition strategy.
Merchant Gourmet was first developed by London-based distributor Leathams in 1995, with the products focused on the core ingredients of lentils, wholegrains, chestnuts and mushrooms.
Today, the brand supplies 35 SKUs across ready-to-eat grains and pulses pouches, microwaveable rice, mushrooms, chestnuts and meals. It is projected to turn over around £28m for the year to 28 March 2026 having registered strong double-digit growth in the past two years as consumers search out premium, healthy and convenient meal options.
“Replicating the success of our previous two acquisitions, we will be deploying our proven branded growth model, expanding retailer distribution, accelerating new product development and increasing marketing investment to unlock further profitable growth for the brand,” Whitehouse said.
Premier’s boss highlighted plans to boost growth momentum via further deals back in May when the group revealed annual branded sales had exceeded £1bn for the first time.
Analysts at Deutsche Numis expected more M&A activity from Premier in the future thanks to a health balance sheet. “Our analysis suggests that it has up to c.£400m of potential acquisition firepower,” the firm said.
Jefferies added the latest deal carried all the hallmarks of the previous successes with Fuel 10K and The Spice Tailor. “[Merchant Gourmet is] a strong brand in an attractive area of the market that has built good distribution but has significant scope to be scaled up.
“We see it as being a good fit for the Premier Foods stable. It is complementary to the existing portfolio, has a presence in a number of on-trend healthy categories and a clean ingredient list.”
The deal is expected to complete on 1 September 2025 and all 25 Merchant Gourmet employees will transfer to Premier Foods.
“Merchant Gourmet has always been about creating great-tasting, premium, healthy food that anyone can enjoy,” said managing director Richard Peake.
“Over the last few years, our team have worked incredibly hard, delivering double digit revenue growth and demonstrating huge success in entering new categories and new markets. Finding the best home for both Merchant Gourmet and our valued team is something we have thought carefully about, and we believe Premier Foods is the right partner to match our ambition.”
No comments yet