Premier Foods offloads canned arm to Princes
Premier Foods has sold its canned foods division, including the Fray Bentos and Crosse & Blackwell names, to Princes in a £182m deal.
Entering the Fray: Princes will take on a host of household name brands.
The acquisition will see factories at Long Sutton in Lincolnshire and Wisbech in Cambridgeshire, which employ more than 1,000 people, change hands.
Liverpool-based Princes has also secured a long-term licence to make products such as baked beans and pasta in cans under the Branston and Batchelors brands.
The sale, which is subject to a number of conditions, comes less than a month after Premier offloaded its meat-free business Quorn for £205m in a drive to lower its debt mountain, which stood at £1.4bn in June.
Following the announcement of the deal, shares in Premier Foods stood firm, just 0.05p lower at 22.8p.
The deal will enable Premier to focus on key brands such as Hovis and Mr Kipling.
Princes, which has grown from being an importer of canned fish into a supplier of products ranging from fruit juice and canned meat to microwave meals and sandwich spreads, will have annual revenues of £1.5bn following the deal.
It will also have 13 production sites and a 4,500-strong workforce.
As well as Crosse & Blackwell and Fray Bentos, Premier is also selling the brands Farrows and Smedley's.
Premier's East Anglian canned grocery operation achieved sales in the region of £334m and underlying earnings of £32m in 2010.
The disposal excludes Premier Foods' Ambrosia branded canned desserts operations in Lifton, Devon, which is being retained.
Premier's chief executive, Robert Schofield, said: 'Selling the business simplifies our operations and allows us to concentrate our efforts on our current portfolio of great British brands.'
The deal also improves Premier's earnings to debt ratio - a key measure in the City - after an acquisition spree in recent years that has included Hovis owner RHM and Campbell's Soup in the UK and Ireland.
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