British food producer Premier Foods Plc (LON:PFD) said on Tuesday it had reached a conditional agreement to offload its sweet pickles and table sauces operations to Japan’s Mizkan Group Corp for GBP92.5m (USD148.6m/EUR114.7m) in cash, which will be deployed for debt reduction.
Upon finalisation of the transaction, which is seen to occur early next year, following green light from the vendor’s stockholders and approval from its back syndicate, Premier Foods will have raised GBP370m in proceeds from offloads since March 2012. This amount is well over the target of GBP330m by June 2014, agreed upon with its lenders under its new financing arrangements, the British company said.
The business to be shed includes the manufacturing, distribution, sales, marketing and licensing of the Branston brand, a private label operation and the Bury St Edmunds manufacturing site in Suffolk. The product range includes sweet pickle, ketchup, relish, salad cream and mayonnaise.
With the disposal, Premier Foods will be able to concentrate efforts on its grocery business and on building value in the bread line, its CEO, Michael Clarke, said. Upon close of the transaction, the branded sales mix of the grocery operations will represent some 90%.
The Branston brand is a strategic addition to Mizkan’s global range and enhances the group’s position to expand in the UK, Mizkan’s CEO, Kazuhide Matazaemon Nakano VIII, added.