Last checked at 6 Apr 2009 07:00
Cranswick plc ("Cranswick") - acquisition of pork processing business
Cranswick announces today that it has exchanged contracts to acquire the whole of the issued share capital of Bowes of Norfolk Limited ("Bowes") from the Bowes family for a cash consideration of £17.2 million to be funded from existing bank facilities. Completion of the transaction is conditional on clearance by the UK Competition Authorities. Subject to this clearance, the transaction is expected to complete in 10 weeks.
Bowes is a long-standing family-owned business based in Norfolk. The business has been involved for many years in arable farming, pig-rearing and pig-meat processing. The arable farming business will be retained by certain members of the Bowes family together with a portfolio of properties. On completion the pig-rearing business will be sold to a management buy-out team (the "MBO") comprising certain members of the Bowes family and certain members of Bowes' management. A pig supply agreement will be entered into by both parties on completion covering, inter alia, the supply of pigs by the MBO to Bowes. The net assets of Bowes on completion excluding the arable farming business and after disposal of the pig-rearing activities are expected to amount to £9.6 million (including cash balances of £6.0 million). The adjusted profit before interest and tax attributable to the assets being acquired by Cranswick included in the audited accounts of Bowes for the year ended 29 March 2008 amounted to £2.1 million on sales of £75.8 million and the gross assets of the business at that date were £21.8 million.
Bowes has a defined benefit pension scheme with 390 members. The scheme has been closed to further benefit accrual since 2004. The deficit reported in the audited accounts of Bowes as at 29 March 2008 amounted to £2.7 million before tax. Agreement has been reached with the pension scheme trustees on the impact of the transaction on the scheme.
Bowes is a significant operator in the pig-meat processing sector and the acquisition re-inforces Cranswick's position in that industry. The business will continue as a separate operation within Cranswick with its own management team reporting directly to Adam Couch, the Cranswick main board director responsible for the Group's fresh pork operations. We look forward to the 620 employees who work for the pork-processing operation of Bowes joining Cranswick and to working with the MBO team in respect of the supply of pigs to Bowes.
Enquiries:
Martin Davey 01482 372080 (Mobile 07775 576426)
John Lindop 01482 372090 (Mobile 07768 362592)