Meat firm Cranswick has acquired Dunbia’s Northern Ireland pork business for an amount that has not been disclosed, effectively increasing its pig processing capacity.
The company, which employs 360 carries out its operations in a purpose-built facility in County Antrim, Dunbia processes about 7,800 pigs every week.
Pork business sales amounted to £72.4M for the year to 29 March 2016.
Fundes from Cranswick’s current debt facilities will be used to fund the transaction, and the company is projected to be earning neutral in the current financial year. However, it is expected to be earnings enhancing come 2018.
Jack Dobson, who is Dunbia Executive Director, will stay on as a consultant in order to help with the acquisition process.
‘Bigger Say over the Supply Chain
According to Cranswick CEO Adam Couch, the purchase added more muscle to the company’s UK processing business, giving it bigger control over the supply chain.
Couch was quoted saying: “It ensures we can maintain the production and processing of high quality, UK farm-assured pigs, which is central to our customers’ requirements,”
According to Clive Black and Darren Shirley, who are both Shore Capital analysts, the acquisition signified “another sensible strategic move” by the firm in adding to its essential activities a complementary pig production area both North Yorkshire and Norfolk.
In the takeover announcement, only scanty financial details were provided. The company will release its interim results on November 29, when Black and Shirley expect better clarification.
No Change to forecasts
They were quoted saying: “In that respect we leave our sales, profit, cash flow and debt forecasts unchanged ahead of the interim results, though at this stage see the potential for a mid-single digit upgrade to FY2018 on earnings-per-share expectations, and the prospect of a modest net debt position at the 2017 financial year-end (current forecast £5.6M net cash).”
The activities of the firm, which include processing and supplying fresh pork, bacon, sausages, cooked meats, quality fresh and cooked poultry, as well as charcuterie and pastry products, are focused within the United Kungdom.
In the year to 31 March, 2016 Cranswick recorded sales to the tune of £1.07bn, and £58.7M pre-tax profit, and it sold The Sandwich Factory, its sandwich business to Greencore Group for £15M in July this year.