Premier Foods shares gained 3.3% to 116.8p in late morning trading on Monday following the company’s reported acquisition of Indian and South East Asian meal kits producer The Spice Tailor for £43.8 million.
The company confirmed it would acquire 100% of shares in the meal kits firm on a cash and debt-free basis, with additional consideration dependent on a future performance and an earn out structure over a three year term from FY 2023/2024, pending future growth targets.
“We’re very pleased that The Spice Tailor will become part of Premier Foods and are looking forward to unlocking further growth for the brand which we have nurtured since its inception,” said The Spice Tailor co-founders Adarsh and Anjum Sethia.
“We see Premier with their track record of brand investment and strong commercial relationships, as the perfect fit for The Spice Tailor, driving it onto the next stage of its evolution.”
Premier Foods highlighted The Spice Tailor as a high growth premium brand, with a 20% compound annual growth rate over the last four years and a forecast to deliver high sales and profit growth in the coming years.
The meal kits group is expected to generate £17.3 million in revenue for FY 2022/2023.
The acquisition is set to expand Premier Foods’ footprint in the UK, Australia, Canada and Ireland, and complement its Sharwood’s and Loyd Grossman brands.
“We have greatly admired The Spice Tailor business for some time and we’re very much looking forward to it joining our existing stable of strong brands,” said Premier Foods CEO Alex Whitehouse.
“The acquisition is well aligned to our growth strategy and we see a clear opportunity to build on the excellent track record of The Spice Tailor, by leveraging the elements of our proven branded growth model.”
“This acquisition represents a highly complementary geographical fit, and we see significant potential to expand The Spice Tailor’s distribution in all our target markets. We see this as another important milestone for us following the Group’s strong performance over recent years and The Spice Tailor is an important addition to accelerate our future growth plans.”
