Food group Greencore has announced plans to buy UK-based group Uniq in a deal worth £113m (€125m). Greencore will fund the buy through a rights issue aimed at raising around €80.2m.
Greencore said the deal would help the combined group boost its presence in the UK convenience food market, and add new customers - in particular Marks & Spencer.
Uniq, which was formerly Unigate, earlier this year completed a restructuring prompted by a big increase in its pension deficit. As a result of this, as well as previous trading losses, Greencore believes Uniq's profits can be sheltered from tax for the foreseeable future.
Greencore CEO Patrick Coveney described the deal as 'an important milestone' for the company. Greencore also said the buy would add significantly to its earnings in the coming years and deliver savings of around €10m a year.
Angel Street, which owns more than 90% of Uniq, has agreed to accept the Greencore offer.
Greencore is planning a five for six rights issue at 46 cent per share - a discount of more than 50% - to help fund the acquisition.
Separately, Greencore issued a trading update for the three months to July 1, which showed that underlying revenue was 6% ahead of the same period last year. Convenience foods revenue rose by 4%, helped by good weather in April and May and good sales growth in the US.
It said it expected trading in its key UK food market to remain tough and volatile. Revenue in the ingredients and property business jumped by 24%.
