Bakkavor exits China with sale of operations to local firm

Fresh products supplier Bakkavor, which is the taxable of a takeover connection by adjacent Greencore, is selling its operations successful China.

In a transaction that UK-headquartered Bakkavor enactment astatine astir £50m ($66.9m), the China concern is being offloaded to Lihe Xing (Qingdao) Food Technology Co., which is wholly owned by Lihoo's (Qingdao) Food Industry Company, according to a connection contiguous (29 April).

Bakkavor, a private-label shaper of acceptable meals to caller salads and dips, added the woody includes 7 manufacturing facilities successful China.

It said Bakkavor China Holdings supplies the retail and foodservice channels with salads, acceptable meals and sandwiches. The concern generated gross past twelvemonth of £105m, portion the factories employment astir 2,300 people.

“Over the past 2 years, Bakkavor has made important advancement successful simplifying its operations successful China and, arsenic portion of its antecedently stated reappraisal of its strategical options, this merchantability completes the group's exit from the region,” the London-listed concern said.

CEO Mike Edwards added: “With beardown foundations successful place, we are assured that going guardant the concern and its stakeholders volition payment from Lihoo's section expertise and acquisition arsenic a frozen and caller repast manufacturer.

"Over the past 20 years, we person built a large concern successful China and I would similar to convey each our China colleagues for their publication to the important advancement we person made successful caller years.”

The transaction needs regulatory support successful China and if that is forthcoming, the woody is expected to adjacent successful the 2nd fractional of this year.

Bakkavor added that arsenic of the extremity of December, the “carrying value” of its assets successful China was £39m, with a “net nett connected disposal” expected to beryllium astir the £15m mark.

The China operations were “historically dilutive” to the company’s adjusted operating nett margin, Bakkavor said, arsenic it seeks to execute a “medium-term” borderline people of 6%.

That borderline was 5% successful 2024, up 70 ground points from the erstwhile year, Bakkavor revealed successful March erstwhile it published its yearly results.

Adjusted operating nett accrued 20.5% to £113.6m based connected radical gross of £2.29bn, which represented a 4% summation connected the corresponding period.

Adjusted EPS was 12.3 pence, compared to 8.8p.

Greencore, meanwhile, was fixed an extended play to reason its bid for Bakkavor earlier successful April, with the UK Panel connected Takeovers and Mergers granting the people company’s petition for an hold to 9 May.

Ireland-headquartered Greencore archetypal made an attack for Bakkavor successful March but had 2 offers turned down.