Premier Foods

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Premier Foods plc
Public
Traded as LSEPFD
Industry Food Manufacturing
Founded 1976 (as Hillsdown Holdings)
Headquarters St. Albans, Hertfordshire, United Kingdom
Key people
David Beever, (Chairman)
Gavin Darby, (CEO)
Products Foods
Revenue £767.4 million (2014/15)[1]
£131.0 million (2014/15)[1]
Number of employees
3,675 (2015)[1]
Website www.premierfoods.co.uk

Premier Foods plc is a British food manufacturer headquartered in St Albans, Hertfordshire. It is listed on the London Stock Exchange and is a constituent of the FTSE SmallCap Index.

The group owns many well-known brands, including Mr Kipling, Ambrosia, Angel Delight, Homepride cooking sauces, Sharwood's, Loyd Grossman sauces, Oxo, Bisto and Batchelors. Premier Foods also produce cakes under the Cadbury's name, using the brand under licence.

Premier Foods primarily competes with Unilever, Associated British Foods, 2 Sisters Food Group, Greencore and Interlink.

History[edit]

Formation[edit]

The company was founded by Harry Solomon and David Thompson in 1975 as Hillsdown Holdings. His son Richard Thompson worked for his father after his education at Haileybury. The name came from Thompson's house - Hillsdown. In 1981 it acquired Lockwood Foods Ltd[2] which was in administrative receivership owing approximately £11 million to creditors. Lockwood Foods had canneries in Long Sutton and Forfar. In May 1987 David Thompson stepped down from Hillsdown Holdings, selling 50% of his shares and became a non executive director. In April 1989 he sold all of his shares.

In 1986, it bought various food businesses from Beechams[2] and in 1990 it acquired Premier Brands, the MBO led by Paul Judge of Cadbury Schweppes PLC's Foods and Other Products Divisions which included Typhoo and Cadbury's drinks.[2]

It was bought by the private equity company Hicks, Muse, Tate and Furst in 1999.[3] In 2002, it bought Nestlé's ambient foods business.[4] It was first listed on the London Stock Exchange in 2004.[5]

Expansion[edit]

In 2004, it acquired the Ambrosia brand, that produced rice pudding and custard, from the Colman's division of Unilever.

In February 2005, Premier Foods acquired Kraft Foods' ambient desserts businesses including Bird's custard and Angel Delight.[6]

In June 2005, Marlow Foods,[7] makers of Quorn, was purchased and this was followed in October by the acquisition of Cauldron, consolidating the two leading brands in the meat-free category.[8] That month, Premier Foods announced the sale of Typhoo Tea to India's Apeejay Surrendra Group for $140 million. Immediately after the sale, The Sirhowy Group confirmed it had acquired a 2% stake in Premier Foods, supporting the company's strategy to make debt reduction a priority.[9]

In 2006, Premier Foods acquired the UK and Ireland businesses of Campbell's for £460 million. Brands included in the deal were Oxo, Batchelors, Homepride and Fray Bentos. The iconic Campbell's Soup cans had to be rebranded as Batchelors Condensed Soup (as the brand itself was not acquired) but labels still carried the label "Formerly Campbell's. Same great taste."[10] Similarly, Campbell's Meatballs were rebranded as Fray Bentos.[11] Subsequently, the closure, in December 2007, of the King's Lynn depot where Fray Bentos pies are made, was announced.[12]

In March 2007, Premier Foods completed the takeover of its rival Rank Hovis McDougall (RHM) for £1.2 billion.[13] In July 2007 Premier Foods announced it would close several RHM sites: Bristol, Droylsden (makers of Robertson's Golden Shred since 1890 and Sharwood's brands), Middlewich (makers of Bisto and Salts), Wythenshawe (makers of Sharwood's Pappadoms and Paxo), Ledbury (makers of specialist jams) and Reading (Foodservices).[14] During 2008, the Hovis range was re-launched. In 2009, Premier Foods sold its frozen bakery business, including Le Pain Croustillant and Sofrapain, to Nutrixo.[15]

Restructuring[edit]

In February 2011, Premier Foods sold its Crosse & Blackwell, Fray Bentos and Smedley's businesses to Princes for £182 million.[16] It followed this is March with the sale of Marlow Foods to Exponent Private Equity and Intermediate Capital Group for £205 million ($331.6 million),[17] resulting in the creation of a new company, Quorn Foods. Premier Foods said the deal was part of a strategy to reduce its debt, which built up following an acquisition spree that included Hovis-owner RHM and Campbell's Soup in the UK and Ireland. 2 Sisters Food Group bought Premier Foods' Brookes Avana business in December 2011.[18]

In 2012, the company announced it had agreed a re-financing package, which required the disposal of additional assets.[19] Premier Foods reached agreements with Mizkan to sell its Haywards pickle and Sarson's and Dufrais vinegar businesses in June,[20] followed by Branston in October that year.[21] In August, the company sold its sweet spreads and jellies division, including Hartley's Jam, Sun-Pat Peanut Butter and Robertson's, to Hain Celestial Group.[22]

In January 2014, Premier Foods announced a new capital structure for the business which included an underwritten equity issue of approximately £353 million, a new pension schemes agreement, a high yield bond of £500 million and a new lending agreement with a smaller banking group. Premier also became a 'grocery-only' business with the movement of the Hovis brand into a joint venture with US-based venture capital fund The Gores Group. Premier Foods sold a controlling 51% stake in the joint venture to The Gores Group, which saw Hovis become a private company.[23]

The Hovis spin-off was followed in June 2014 by the announcement that the company would spin-off its powdered food and drinks manufacturing operations in Knighton into a joint venture called Knighton Foods. Premier Foods sold a controlling 51% stake in the venture to Specialty Powders Holdings.[24]

In 2014 the group hit controversy as it emerged they are charging suppliers for the right to sell goods and services to Premier Foods. One supplier said the practice - known as pay and stay - was like "blackmail".[25]

In November 2015 the group announced a new partnership with celebrity baker Paul Hollywood to produce a range of bread, savoury and sweet mixes, designed to make artisanal baking accessible to consumers.[26]

The company announced a partnership with the Japanese company Nissin Foods in March 2016, whereby the companies would distribute each other's products in their home markets.[27] Premier Foods also revealed it had rejected an unsolicited takeover approach from McCormick & Company. Nissin subsequently purchased a 17.3% stake in the company.[28] McCormick dropped its takeover bid in April 2016.[29]

Brands[edit]

Premier Foods' largest brands include:

References[edit]

  1. ^ a b c "Annual Report 2014/15". Premier Foods plc. 
  2. ^ a b c Premier Foods: History Archived August 31, 2011, at the Wayback Machine.
  3. ^ "Hicks Muse buying a British food company". New York Times. 15 May 1999. Retrieved 18 March 2013. 
  4. ^ "Hicks Muse builds Premier Foods with Nestle brands buy". Findarticles.com. Retrieved 18 March 2013. 
  5. ^ "Premier Foods initiated with 'hold'". Newratings.com. Retrieved 18 March 2013. 
  6. ^ "Premier gobbles up Bird's custard". BBC News. 10 December 2004. Retrieved 18 March 2013. 
  7. ^ "Premier buys Quorn Firm for £172m". BBC News. 6 June 2005. Retrieved 18 March 2013. 
  8. ^ Barry Callebaut's Sofie De Lathouwer. "Premier buys Cauldron Foods for £27m". Just-food.com. Retrieved 18 March 2013. 
  9. ^ "Typhoo Tea bought by Indian Firm". BBC News. 13 October 2005. Retrieved 18 March 2013. 
  10. ^ "UK shops to lose famous soup can". BBC News. 1 October 2007. Retrieved 18 March 2013. 
  11. ^ "Campbells Grocery Products Production Line Enhancements, Worksop, United Kingdom". Foodprocessing-technology.com. 15 June 2011. Retrieved 18 March 2013. 
  12. ^ Attwood, Karen (20 January 2007). "Premier Foods to close two factories with loss of 450 jobs". London: The Independent. Retrieved 20 January 2007. 
  13. ^ Kamp, David. "Premier Foods pays $2.4bn for RHM". International Herald Tribune. Retrieved 18 March 2013. 
  14. ^ Premier Foods to close six factories
  15. ^ "Premier Foods sells Le Pain Croustillant & Sofrapain". Stamford Partners. 30 April 2009. Retrieved 1 February 2016. 
  16. ^ Fletcher, Nick (8 February 2011). "Premier Foods bids goodbye to Crosse & Blackwell and Fray Bentos to cut debt". The Guardian. Retrieved 3 February 2016. 
  17. ^ Ebrahimi, Helia (25 January 2011). "Premier Foods sells Quorn and Cauldron for £205m". The Telegraph. Retrieved 1 February 2016. 
  18. ^ Stones, Mike (8 December 2011). "Premier Foods sells Brookes Avana to 2 Sisters". Food Manufacture. Retrieved 1 February 2016. 
  19. ^ "Premier Foods announces refinancing deal". London. 13 March 2012. Retrieved 22 January 2014. 
  20. ^ "Premier Foods sells Sarson's and Haywards for £41m". BBC News. 15 June 2012. Retrieved 1 February 2016. 
  21. ^ "Branston sold by Premier Foods to Japan's Mizkan". BBC News. 30 October 2012. Retrieved 1 February 2016. 
  22. ^ "Premier Foods sells Robertson's and Hartley's for £200m". BBC News. 23 August 2012. Retrieved 1 February 2016. 
  23. ^ Brownsell, Alex (27 January 2014). "Premier Foods sells controlling stake in Hovis". Marketing Magazine. Retrieved 29 January 2016. 
  24. ^ Chesters, Laura (18 June 2014). "Premier Foods cooks up cost-cutting deal for Bird’s Custard, Angel Delight and Marvel". The Independent. Retrieved 25 March 2016. 
  25. ^ "Premier Foods accused over 'pay and stay' practice". BBC News. 
  26. ^ "Premier Foods teams up with Bake Off's Paul Hollywood as sales rise". The Telegraph. 
  27. ^ "McCormick says it may up bid for Premier Foods". BBC News. 24 March 2016. Retrieved 26 March 2016. 
  28. ^ Armstrong, Ashley (24 March 2016). "Premier Foods locked in shareholder row over McCormick bid". The Telegraph. Retrieved 26 March 2016. 
  29. ^ Serafino, Phil. "Premier Foods Plunges After McCormick Abandons Buyout Talks". Bloomberg. Retrieved 13 April 2016. 

External links[edit]