Cranswick buys poultry producer Crown for £40M

Thought to be the UK’s six largest poultry processor, by volume, East Anglia-based Crown processes up to 500,000 chickens each week.

The acquisition represents a big boost for Cranswick’s chicken processing capacity. The firm’s Benson Park currently processes the equivalent of about 250k birds a week, at the premium end of the market.

Crown breeds, rears and processes fresh chicken to supply customers in the: grocery retail, foodservice, wholesale and manufacturing sectors. Crown was also said to have a well-invested and efficient milling operation, which fulfilled all of the business’s own feed requirements and supplied feed to other pig and poultry producers in East Anglia.

Cranswick ceo Adam Couch said the deal represented an important strategic step.

‘An excellent opportunity’

“Crown is a well-respected operator in the UK poultry sector and represents an excellent opportunity for Cranswick to continue the development of its UK poultry business, building on the highly successful acquisition of Benson Park, the market leading producer of premium cooked poultry, in October 2014,” said Couch.

“This acquisition represents important progress in our long-term growth strategy of developing new product channels in both pork and other proteins.”

Cranwick predicted the deal would be “modestly earnings enhancing” in the manufacturer’s current financial year.

Last year Crown achieved revenue of £83.8M and adjusted earnings before interest, tax, depreciation and amortisation of £6.6M. The firm’s adjusted gross assets were £28.4M. 

Achieved revenue of £83.8M

Crown’s chairman David Thacke will retire from the business, while mill director Nigel Armes and agricultural director Matthew Ward will remain with the business.

City analysts welcomed the deal, which will be funded from existing bank facilities.

Shore Capital analysts Clive Black and Darren Shirley said: “We view the acquisition as highly complementary to management’s medium to long-term strategy to drive growth through the development of new product channels in both pork and other proteins.”

The acquisition was expected to be immediately earnings enhancing and Shore Capital upgraded its financial year 2017 forecasts, with sales predicted to reach £1,189M compared with a previous estimate of £1,108M.

Earnings per share were expected to rise by 7%.

N+1 Singer concluded: “Cranswick has taken the next step to bolster its position in the poultry sector by acquiring Crown.”

The acquisition was a good strategic move, which reflected “a strong historical track record of diversifying the business and driving accretive growth”.