Premier Foods (LON:PFD) has made a strategic move to bolster its presence in the breakfast market with the acquisition of FUEL10K, a brand popular among younger consumers for its granola, oats, and protein-enriched drinks. The acquisition, valued at £34 million, is expected to significantly enhance Premier's appeal to a younger demographic and spur profitable growth.
The transaction details include an upfront cash payment of £29.6 million and a deferred payment of £4 million tied to growth targets. The initial payment was funded from Premier Foods' cash reserves, with the deferred payment due in 2026/27, potentially increasing based on growth targets.
The acquisition of FUEL10K follows Premier Foods' successful integration of The Spice Tailor and Ambrosia porridge pots. CEO Alex Whitehouse views this as a continuation of the company's strategic expansion, predicting it will fuel profitable growth.
Following the announcement of the acquisition today, Premier Foods Plc's (LON: PFD) share price escalated 4.78%, hinting at financial benefits for the company. FUEL10K has consistently reported double-digit revenue growth over three years, aligning with modern food trends and contributing to Premier Foods' strategic approach to expanding its market share in the breakfast sector.
The acquisition is set to boost earnings in the first operational year and is part of Premier Foods' larger strategy to strengthen its foothold in key markets through targeted acquisitions and product integrations.
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