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Sausage-maker completes £17.2m deal for rival
PREMIUM sausage-maker Cranswick has completed a deal to buy rival pork supplier, Bowes of Norfolk, for £17.2m.
Hull-based Cranswick will take on the Bowes pig-meat processing arm, which employs 620 people, but will sell the company's pig-rearing operations to a team consisting of members of the Bowes' family and management.
The two businesses will maintain a supply agreement
Cranswick, which has received competition clearance for the deal, supplies Sainsbury's Taste the Difference range while Bowes supplies fresh pork cuts and joints to Tesco.
Cranswick's chairman, Martin Davey, said the acquisition will have no detrimental effect on East Yorkshire farmers as the group plans to increase work with pig farmers in the region.
"We saw sales of 600m last year and we're looking at further growth," he said. "We want East Yorkshire and Norfolk to grow.
"This is a really good transaction for us," he said. "It will be immediately earnings enhancing and is part of our plan to grow the business both through acquisitions and organically."
Investec Securities analyst Nicola Mallard said the acquisition reduced the number of major suppliers in the sector from four to three.
"This looks a very attractive deal for Cranswick," she said. "It consolidates the sector further and will significantly increase Cranswick's business with Tesco in fresh pork."
In addition to providing pork for Tesco's Finest, standard and value ranges, Bowes supplies UK meat manufacturers, which make hams, pies, sausages, bacon and processed meats for major retailers and restaurants.
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Friday 25 May 2012
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