It confirmed its purchase of Jersey Royal Company (JRC) today (May 16). Based in Jersey, JRC has been established for 20 years, growing, packing and supplying the internationally recognised and protected Jersey Royal potato brand to UK retailers.
It also owns the Kent Potato Company (KPC), which operates from a site in Kent where it grows, packs and supplies retailers with locally sourced Kent potatoes. In the year to December 31 2013 it claimed sales of £31.5M.
Produce Investments said the move would give it access to a wider range of products and customers, including new customers the Coop Group, Asda, Aldi and Lidl, plus more business with Tesco. It expects the agreement to deliver increased profits in its 2015 financial year.
Jersey Royal brand
Benefits also included ownership of the widely recognised Jersey Royal brand and access to the earliest season potatoes, it said.
Reports Produce Investments had launched a bid for JRC surfaced in January. Under the terms of the deal, Produce World, which also owns potato processor Greenvale, has bought JRC for £11M in cash and £4M in shares.
It has also agreed to acquire Peacock Farm, which owns the freehold property for JRC’s main Jersey packing site, for £6.35M from Jersey Royal Property Holdings within three years.
The transaction was funded partly by capital expenditure and share placement and partly through loans provided by HSBC.
‘Future earnings potential’
“I am delighted we have been able to purchase such a well-known business,” said Produce Investments chairman Barrie Clapham. “It takes the company into a very significant sector of the potato market and we are both excited and confident about the future earnings potential.”
Separately, Produce Investments has confirmed plans to shut one of its three main potato packing facilities, located at Tern Hill and managed by subsidiary Greenvale, with the loss of almost 200 jobs.
The decision follows a 45-day consultation process with employees, launched in March. Operations at the plant would cease in August, with volumes transferring to its two remaining factories in the Scottish Borders and Cambridgeshire, the company said in a statement.