Sugar firm buys stronger position in cake ingredients
Hero has sold UK bakery ingredients division Renshaw Scott to UK
sugar ingredients company Napier Brown Foods.
Under the terms of the deal, worth £18.5 million, the UK supplier of value-added sugars, nuts and dairy powders will take over Renshaw Scott's production sites in Liverpool and Carluke, Scotland, as well as all 175 employees.
"This acquisition takes advantage of greater purchasing power, as well as increasing manufacturing efficiencies in combining the two businesses," Patrick Ridgwell, chairman of Napier Brown Foods commented.
The latest move marks the fifth acquisition by the sugar merchant since its listing on AIM only nine months ago, and will build up the firm's position in the cake covering market.
"With this latest acquisition we are creating a major force in the manufacture and supply of bakery ingredients, in particular cake coverings," added the chairman, claiming that current trading for the company was in line with market expectations.
As part of the deal, Napier Brown will continue to supply sugar paste, marzipan and chocolate-based products to Hero's market-leading UK Supercook retail operations.
Renshaw Scott, with a turnover of £27.2 million in 2003, makes retail and industrial marzipans, ready-to-roll icings, baking chocolate and jam. Napier Brown will be pushing its newly acquired ingredients portfolio into the food products of current customers that include Kelloggs, Tesco, Morrisons, Cadbury Schweppes and Thorntons.
Marco Gadola, CFO of the SF1.4 billion jam firm, said the divestment represents a further step in Hero's strategy to divest non-core assets and to focus on its retail baking aids businesses.
