Premier Foods sells Elephant Atta for £34m
The proceeds of the sale will be used to pay down debt.
The UK-based Premier Foods has sold its Elephant Atta ethnic flour business to Westmill Foods, subsidiary of Associated British Foods (ABF), for a cash consideration of £34m as part of its strategy to divest selected non-core businesses.
The sale includes the Elephant Atta, Elephant Chakki Gold and Fassal brands, predominantly manufactured and packed at the Premier Foods mill in Southampton.
For the year ended 31 December 2011, Elephant Atta generated revenues of £17.8m and an EBITDA of £6.4m. The brand is sold in a variety of medium, self-raising, white, brown and wholemeal flours.
Michael Clarke, CEO of Premier Foods, said:
We are continuing to deliver on our growth strategies, growing our Power Brands, divesting selected, non-core businesses and reducing costs on track with our plans. The Elephant Atta brands are great brands that I’m sure will benefit from being part of Westmill Foods.
George Weston, chief executive of Associated British Foods, said:
Elephant Atta is the UK’s leading ethnic flour brand and will complement Westmill’s other leading ethnic brands including Tolly Boy rice, Rajah spices, Lucky Boat noodles and Patak’s pastes and sauces.
Both companies have signed a co-packing agreement, under which Premier Foods will continue to manufacture the Elephant Atta brands at its Southampton mill.
Last month, Premier Foods reached an agreement to sell its vinegar and sour pickles business to the Mizkan Group for £41m.