Bernard Matthews sells German subsidiary to lessen debt

The proceeds from the deal with the Sprehe Gruppe will be used for reducing Bernard Matthews’ £129M debt.

Bernard Matthews said: “The BMO business has flourished in the last few years but has also grown more independent of the UK Bernard Matthews business.

“It made strategic sense both for the UK group and for BMO to find a new owner who could bring the resource and strength in the German market that could exploit fully the BMO brand and operations. The proceeds from the sale will reduce group debt by [£11.9M] €14M.”

Non-core business

Chairman of Bernard Matthews Alan Jamieson said: “The sale of this non-core business releases capital that will be useful to the UK operation as we continue to rebuild profitability and to invest in the UK’s leading turkey producer and only significant independent poultry brand.”

The Sprehe Gruppe claimed to be “one of the largest, most modern and highest-performance full-range traders for fresh and deep-frozen meat products in Europe”. It is known for producing chicken, pork, canned foods and turkey across its 11 Germany-based sites.

New ownership

Bernard Matthews said: “We are very pleased that Sprehe Group have bought the business and are sure the business and all of its people will prosper in this new ownership.”

The deal is subject to clearance by the German anti-trust authorities and is expected to be completed in August 2016.

Bernard Matthews made losses for three consecutive years, and has struggled to come back to profitability since the 2007 avian flu outbreak. The business posted a £30M fall in turnover for the year ending 2015.

Meanwhile, the owner of Bernard Matthews, Rutland Partners approached PriceWaterhouseCoopers (PwC) last week, in an attempt to find a buyer for Bernard Matthews. It is believed Ranjit Singh was the front-runner to buy the business. But 2 Sisters remained quiet on the prospect of it making a takeover bid.