Greencore abandons stateside ambitions
Convenience food giant sells entire US operation after almost a decade
DUBLIN-HEADQUARTERED convenience foods giant Greencore (GNC) is set to sell (15 Oct) its entire US business, bringing its near-decade long attempt to crack America to an end.
While it is an embarrassing climb-down for the group it at least looks a canny deal. Greencore will distribute £509m of the proceeds to shareholders through a special dividend and use the balance to pare down debt.
Sandwiches-to-salads supplier Greencore is selling the challenged US business, beefed up in scale through 2016’s £594.3m Peacock Foods acquisition, to American contract food maker Hearthside for £817m.
Abandoning its US ambitions two years after betting big on America is disappointing, yet Numis Securities points out the business is being sold for an attractive implied EV/EBITDA multiple of 13.4 times.
Moreover, the sale will leave Greencore focused on the attractive UK Food to Go market, where it has a leading position and margin expansion opportunities. (JC)