Premier takes over Quorn company

Premier will operate Marlow as a stand-alone unit, however the acquisition is still expected to generate purchasing and administration synergies of £4m per annum by 2008.

06/06/05 Premier Foods has acquired Marlow Foods Holdings Ltd. the owner of Quorn, the UK's leading meat alternative brand for £172m. Premier will operate Marlow as a stand-alone unit, however the acquisition is still expected to generate purchasing and administration synergies of £4m per annum by 2008.

Premier reported that Quorn provides it with a category-leading established brand with high growth prospects to add to its already strong “Drive” brand portfolio and increases Premier's branded sales mix from 57% to 61%. The UK accounts for 75% of Quorn sales and approximately 21% of sales are exported to Sweden, Switzerland, Belgium and Holland where Quorn holds category-leading positions. In addition, Quorn is the number two meat alternative brand in the natural foods sector in the USA.

Quorn has over a 60% share of the £155m meat alternative category in the UK and a 15% share of the broader £640m meat free category. With approximately 70% of households seeking to eat more healthily, Quorn's excellent health credentials mean it is strongly aligned to consumer trends.

Marlow Foods will continue to be run by its existing management team, led by Managing Director, Nick Hughes, and will benefit from access to Premier's sourcing and routes to market and its more developed presence in the food service channel. Premier also plans to increase brand investment to maximise growth potential.

Quorn sales in 2004 were £79m (representing 100% of the sales of Marlow Foods).Normalised EBITDA2 for 2004 was £15.6m and profit before tax was £4.6m.The business had net operating assets of £48.3m and after deducting the net debt, which is largely due to the capital structure following its acquisition by MPE in May 2003, and other liabilities, it had net assets of £3.0m at31 December 2004.

Since UK national launch in 1994, Quorn has grown to become the UK's largestmeat alternative brand with retail sales of £95m.Over the last five years, Quorn has achieved an average annual sales growth rate of over 7%.From its initial launch targeting the vegetarian consumer, Quorn has successfully increased its appeal amongst healthy eaters and those looking to reduce meat consumption.Marlow Foods now offers a wide choice of Quorn branded products ranging from burgers, sausages and escalopes through to cottage pies and lasagne.