Greencore acquires US food company for $36m

FOOD GROUP Greencore has acquired US convenience food company MarketFare for $36 million (€27.4 million).

The Arizona-headquartered company produces frozen and fresh food products including sandwiches, wraps and Mexican food for small retailers and convenience stores.

It is a major supplier to the convenience food chain 7-Eleven, supplying 1,100 stores in the mid-Atlantic region.

Following the acquisition, Greencore, which already supplies 7-Eleven in the Boston area, will be the largest single supplier to the chain.

The transaction will be funded from Greencore’s existing debt facilities.Revenue at MarketFare for the year to January 2012 was $65 million, while earnings before interest, tax, depreciation and amortisation (ebitda) was $5.7 million.

MarketFare has two production sites, in Salt Lake City, Utah, and in Fredericksburg, Virginia, the largest of which is the Virginia plant, located close to Washington DC.

Greencore chief executive Patrick Coveney said the acquisition would significantly enhance Greencore’s position as a food-to-go provider in the east coast area of the United States.

Greencore currently operates from two sites in Massachusetts.

While US sales account for about 5 per cent of Greencore’s overall revenue, the company hopes to increase its US business significantly over the next few years, according to Mr Coveney. “This acquisition allows us to scale up and build on our existing strategic focus in the US, which is largely focused on serving small stores.” The MarketFare acquisition follows the purchase of US company Home Made Brand Foods in 2008 and On a Roll in December 2010. Earlier this year, Greencore transferred its stock market listing to the UK following the acquisition of British sandwich and dessert supplier Uniq.

Greencore’s share price has risen significantly since the move, and was trading up 1 per cent at 74p yesterday evening in London.

The company retains its headquarters in Dublin.

In a trading update in February – its first since acquiring Uniq last year – Greencore reported a 53 per cent increase in sales to £375.4 million (€447 million) as a result of the acquisition, with core underlying revenue growth up 11 per cent in the first four months of the financial year.