India's biggest fruit and vegetable processing major, Jain Irrigation, has acquired controlling stakes of 80% in Midlands based UK food firm Sleaford Quality Food Ltd in around 10 million pounds deal.
The deal is understood to have been clinched at 3-4 times Sleafords ebidta (earnings before interest, taxes, depreciation and amortization), as is the general norm for valuations and acquisitions in the food sector in UK.
Jain, with a turnover of over Rs 34 billion, also has a call option for acquiring the balance 20% stake in Sleaford - a noted supplier of food ingredients to food industry, both in the wholesale and retail space since 1968 - is based on an earn-out model over a period of four years. Sleaford is a family-owned firm of over 40 years with a large spectrum food ingredients range. The acquisition is perceived as bringing Jain one step closer to market, with opportunity to enter into large ethnic food market in the UK and possibility of addition of new products in Jains food division product range.
Jains food business is worth around Rs 520 crore. For the money were paying, we believe Sleaford affords us very good returns and adds to our top line. Through this deal, we will have direct access to the end user of our products, Jain MD Anil Jain told ET.
Jain cited a pre-agreement justifying his reluctance to spell out the actual value of the deal but maintained to ET Sleaford has been our customer for over 15 years. We chose it as an key entry point into UK because the company adds a three fold value to us. Our mango pulp, for instance, is mainly sold in India and the W Asia thus far and we see the UK market as having the potential to be tapped a lot more. Again, there is a big dry fruits market in the UK and that gives us the opportunity to expand our fruit portfolio by adding to our product line and bankign on Sleafords extensive distribution network in UK. The East Midland region of the UK, is an ideal location for distribution and sale in the entire United Kingdom. Again, since Sleaford caters to the wholesale, big food industry space and has a retail brand (Chef Williams) associated with it, this offers us both advantages. It also affords us the space to enter the retail market in UK.
James Arnold, Managing Director of Sleaford Quality Foods said, Jain is the perfect partner for our business. In addition to their strong product supply support, they bring excellent agricultural and food processing expertise to help improve the success of the business.
Sleafords product range covers a large spectrum of food ingredients including dehydrated vegetables, spices, herbs, dehydrated fruits, soup mixes, pulses, canned vegetables.
For the present, the family that owns Sleaford Ltd will continue to operate it and there will be no major personnel or management leadership changes, Jain said. Jain Irrigation Systems Ltd , with headquarters at Jalgaon in Maharashtra, is a pioneer company in water creation, sourcing, storage structures, micro irrigation systems, hi-tech agri inputs, greenhouse cultivation, manufacture of PVC pipes and piping systems, solar products etc.
It is also India's largest mango pulp processor in the organized sector and amongst the three largest processors in the world It is also the 2nd largest manufacturer of dehydrated onions in the world. Collectively, the company is the largest processor of fruits & vegetables in India.
The deal is understood to have been clinched at 3-4 times Sleafords ebidta (earnings before interest, taxes, depreciation and amortization), as is the general norm for valuations and acquisitions in the food sector in UK.
Jain, with a turnover of over Rs 34 billion, also has a call option for acquiring the balance 20% stake in Sleaford - a noted supplier of food ingredients to food industry, both in the wholesale and retail space since 1968 - is based on an earn-out model over a period of four years. Sleaford is a family-owned firm of over 40 years with a large spectrum food ingredients range. The acquisition is perceived as bringing Jain one step closer to market, with opportunity to enter into large ethnic food market in the UK and possibility of addition of new products in Jains food division product range.
Jains food business is worth around Rs 520 crore. For the money were paying, we believe Sleaford affords us very good returns and adds to our top line. Through this deal, we will have direct access to the end user of our products, Jain MD Anil Jain told ET.
Jain cited a pre-agreement justifying his reluctance to spell out the actual value of the deal but maintained to ET Sleaford has been our customer for over 15 years. We chose it as an key entry point into UK because the company adds a three fold value to us. Our mango pulp, for instance, is mainly sold in India and the W Asia thus far and we see the UK market as having the potential to be tapped a lot more. Again, there is a big dry fruits market in the UK and that gives us the opportunity to expand our fruit portfolio by adding to our product line and bankign on Sleafords extensive distribution network in UK. The East Midland region of the UK, is an ideal location for distribution and sale in the entire United Kingdom. Again, since Sleaford caters to the wholesale, big food industry space and has a retail brand (Chef Williams) associated with it, this offers us both advantages. It also affords us the space to enter the retail market in UK.
James Arnold, Managing Director of Sleaford Quality Foods said, Jain is the perfect partner for our business. In addition to their strong product supply support, they bring excellent agricultural and food processing expertise to help improve the success of the business.
Sleafords product range covers a large spectrum of food ingredients including dehydrated vegetables, spices, herbs, dehydrated fruits, soup mixes, pulses, canned vegetables.
For the present, the family that owns Sleaford Ltd will continue to operate it and there will be no major personnel or management leadership changes, Jain said. Jain Irrigation Systems Ltd , with headquarters at Jalgaon in Maharashtra, is a pioneer company in water creation, sourcing, storage structures, micro irrigation systems, hi-tech agri inputs, greenhouse cultivation, manufacture of PVC pipes and piping systems, solar products etc.
It is also India's largest mango pulp processor in the organized sector and amongst the three largest processors in the world It is also the 2nd largest manufacturer of dehydrated onions in the world. Collectively, the company is the largest processor of fruits & vegetables in India.
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