Greencore shareholders back $747m bid for Peacock Foods

Greencore shareholders have voted overwhelmingly in favour of the food group's acquisition of Peacock Foods for $747.5 million (€695.4 million).

Plans to acquire the Illinois-based convenience food company, which generated about $1 billion in sales and adjusted ebitda of $72.1 million in the year to September, were announced last month.

The deal is expected to more than quadruple Greencore’s total sales in the US.

Investors gathered in Dublin for an extraordinary general meeting on Wednesday to vote on Greencore’s plan to sell £439.4 million (€520.4 million) in shares to existing investors, in what is known as a rights issue, to help fund its purchase of Peacock.

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More than 98 per cent of shareholders backed the Peacock deal.

Chairman Gary Kennedy described it as an exciting day for the company. "The investment is transformational for the company," he said. "It is a real game changer."

Breakfast sandwiches

Peacock is a fast-growing convenience food manufacturer. It supplies Kraft Heinz, Kellogg and Dole, among other big US food producers. About 70 per cent of the firm's revenues are derived from breakfast sandwiches, meal kits and salads.

Chief executive Patrick Coveney said the company had been in direct talks with Peacock’s management since March. The acquisition, he said, will significantly increase Greencore’s manufacturing footprint in the US and give it a leading market position.

“The transaction will generate significant value to shareholders,” added Mr Coveney, citing forecasted revenues for the combined entity of £2.3 billion (€2.7 billion).

“This is a transformational acquisition and one that will dramatically reshape the company, he said.

Competition authorities in the US gave its blessing for the deal last week. The acquisition is expected to be completed by the end of the year.

Speaking to reporters after the meeting, Mr Coveney said the company had not experienced negative trading in the UK following the Brexit vote in late June. He also said he did not expect Greencore to be affected by the election of Donald Trump in the US.

“We don’t think that a mass-market business like ours which is manufacturing food in America will be materially impacted by political change there,” he said.

“Basic eating habits of millions of consumers will continue to endure regardless of who’s in charge,” Mr Coveney added.