November 17, 2016

Ireland-based convenience food giant, Greencore Group announced it has agreed to acquire Peacock Foods from private equity firm, Charlesbank, in a $747.5 million deal that will quadruple Greencore’s U.S. business.

Geneva, Illinois-based Peacock Foods is a rapidly growing producer of convenience foods including frozen breakfasts, salad kits, and children’s Lunchables chilled meats, supplying Tyson, Kraft Heinz, and Dole to generate revenue of $993 million for the 12 months ending September 25.

Greencore expanded into the U.S. market in 2008, but has faced challenges in attempting to scale up the size of its U.S. business. Today, the U.S. accounts for 15 percent of Greencore’s sales, however, this sale, which is the biggest in Greencore’s history, will lift this percentage to 45 percent of its total sales.

“The acquisition of Peacock will transform our US business, strengthen our position in high growth categories, broaden our channel and customer exposure, and add significant scale to our operations, said Coveney in a company statement.

“Through our new customer relationships we will have much greater access and scale in the grocery channel in America,” Patrick Coveney, Greencore CEO told The Telegraph.

Peacock has displayed a track record of impressive growth, posting adjusted EBITDA growth of 36.6 percent for the 12 months ending September 2016. And Greencore expects annual synergies to resulting from the acquisition to total at least $15 million by fiscal year 2019.

The acquisition, which is scheduled to be completed by the end of December, will be funded by a fully underwritten rights issue offered to qualifying shareholders designed to raise £439.4 million (US$547 million) and new debt facilities of about £200 million (US$249 million).

“This is, by an enormous magnitude, the largest deal we’ve ever done,” Coveney told The Telegraph. “And we’re confident shareholders will like it.”

Operating through its seven U.S.-based production facilities, the addition of Peacock Foods will expand Greencore’s geographic network by five times its previous footprint and create a new U.S. division that will be led by Chris Kirke. Thomas Sampson, chief executive with Peacock, will be appointed as a senior advisor to Greencore and will oversee the integration process over the next two years.

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Lynda Kiernan