UK-based food, ingredients and retail group Associated British Foods plc (LON:ABF) on Friday said it was buying the Elephant Atta ethnic flour business of Premier Foods Plc (LON:PFD) for a cash price of GBP34m (USD53m/EUR43m).
This acquisition of a top British ethnic flour brand will add to ABF unit Westmill Foods’ leading ethnic brands such as Tolly Boy rice, Rajah spices, Lucky Boat noodles and Patak’s pastes and sauces, Associated British Foods’ CEO George Weston said in a comment.
Premier Foods, which will use the cash from the sale to reduce debt, said the disposal is part of its strategy to exit selected, non-core operations and cut costs, while growing its power brands, CEO Michael Clarke said in a separate statement.
The business being sold includes the Elephant Atta, Elephant Chakki Gold and Fassal brands, mainly produced and packed at Premier Foods’ mill in Southampton.
Until regulatory clearance for the ownership transfer is obtained, Premier Foods will continue to mill and package the flour brand, the buyer said.
The Elephant Atta business generated revenues of GBP17.8m and EBITDA of GBP6.4m in the year to 31 December 2011, at which date its gross assets stood at GBP3m.
The business was founded in 1962. The Elephant Atta brand sells in a variety of medium, self-raising, white, brown and wholemeal flours used to make chapatti and other unleavened flat bread.
Westmill Foods provides ethnic food products to ethnic retailers and wholesalers in the UK.