Tuesday, February 25 12:28:43
Irish food group, Greencore, today said it has bought a US convenience food manufacturer for an undisclosed sum and will invest USD10m in an existing business in Florida.
It has acquired Lettieri's - a leading manufacturer of food to go products for the US convenience store channel.
It operates from a modern, purpose-built facility in Shakopee, Minnesota and employs approximately 130 staff. For the year ended March 2013, it generated revenue of $36.4m (£21.9m) and attributable EBITDA of $4.7m (£2.8m).
The transaction will be funded from existing debt facilities and is expected to be modestly earnings accretive in the current financial year, Greencore said.
Lettieri's products are manufactured frozen but served hot via roller grills and heated cabinets. They form a primary component of the food to go offering in convenience stores, alongside chilled food to go items such as fresh sandwiches. The product range includes assembled products (e.g. breakfast sandwiches), extruded products (e.g. stuffed baguettes and breadsticks) and enrobed products (e.g. wrap dogs) for the roller grill.
Meanwhile, Greencore also confirmed that it is investing approximately $10.0m in its Jacksonville, Florida facility in order to create the capability to manufacture frozen food to go products. The investment will provide capacity to support up to $100m (£60m) of revenue in products designed for hot eating at both the breakfast and lunchtime occasions. The Group anticipates that the first such products will come to market in the final quarter of 2014.
Commenting on these investments, Patrick Coveney, Chief Executive Officer of Greencore, said: "We have been working since 2011 to build a focused, growing, food to go business in the US. Today's announcement represents an important further step on that journey. Both the Lettieri's acquisition and the capital investment into Jacksonville deepen our manufacturing capability and widen our product range to more fully serve the food to go needs of our customers in the small store channels. Both investments are consistent with our long-term approach of developing high quality manufacturing facilities to meet the specific growth strategies of our key US customers."
The Irish group has multi-million-dollar deals with Starbucks and convenience store 7-Eleven in the US.
Greencore, the world's largest sandwich maker, produces 450 million ready-to-go foods every year.
Sales hit £320.5m (E388m) in the final quarter of last year with US revenues boosted by the Starbucks deal last year.
Mr Coveney admitted with just six production sites in the US, they were constrained by the distribution reach of fresh foods, which can travel a maximum 250 miles.