Barry's Tea and Bank of Scotland have joined forces to buy Northern Foods-owned Batchelors in a €95 million deal. Bank of Scotland's Irish subsidiary and Barry's Tea announced yesterday that they plan to buy Northern Foods Ireland Ltd (NFIL) through a joint-venture, Maiden Acquisition Company.
Maiden, which is 50-50 owned by the two partners, has agreed to pay €95.25 million for NFIL. The sale is conditional on getting approval from the Competition Authority, a process likely to take up to six weeks. Anglo Irish Bank will loan an undisclosed share of the purchase price to Maiden.
NFIL is part of London-listed Northern Foods' Irish division. Its main business is food processor, Batchelors, which is best-known for its tinned peas and beans products. It employs 280 people in Dublin, Belfast and Athy, Co Kildare.
NFIL also owns Beck Smith, which manufactures and/or distributes a range of other brands, including Squeez orange juice and Old El Paso convenience food products. Northern bought Batchelors in 1986 for £13 million sterling and Beck Smith in 1991 for £1.5 million.
Maiden said yesterday that it would not make any changes to the businesses and would leave them in the charge of the current management. However, it will be appointing Ms Claire Carroll of Bank of Scotland Ireland, and Barry's Tea directors, Mr Tony Barry, to the Batchelors board.
In a statement yesterday, Northern Foods said described both businesses as "solid". In the year to March 30th, NFIL generated a pre-tax profit of €7.9 million on a €76 million turnover. The company said that in terms of its own balance sheet the disposal amounted to €24 million in net assets and €15 million in goodwill.
Northern's finance director, Mr Sean Christie, said yesterday the sale was in keeping with its strategy of concentrating on food businesses with a strong presence on the UK multiples' shelves.
Batchelors in Ireland split from the British company of the same name during the second World War, there is no link between the two.
"They are entirely separate companies with their own territories," Mr Christie explained.
He added that Northern has no plans to sell its two other Irish properties, Green Isle and Goodfellas Pizzas.
While their operations are almost completely Irish-based, both have strong UK sales. Mr Christie said the latter was the number one frozen Pizza brand in Britain.
Last month, Northern Foods announced that interim pre-tax profits fell 16 per cent to £32.5 million sterling (€46.2 million) in the six months to September 30th. Sales rose 6.5 per cent in the same period to £722 million.
Northern bought San Marco Pizzas and took complete ownership of Solway Foods during the year.
Barry's Tea is an unlimited company controlled by Barry's (Cork) Ltd, which is 99 per owned by former Tánaiste and Foreign Minister, Mr Peter Barry. The latest available returns to the Companies' Registration Office show that its pre-tax profits grew by over 60 per cent to €6.1 million from €3.7 million in the year ended April 26th, 2002.
Turnover increased to €24.3 million from €22.1 million. The figures show that along with the increased sales, cost savings of €230,000 helped ensure strong profit growth. It retained profits of close to €5.5 million for the year, bringing the profit and loss account to €54.8 million. It had net assets of €56.1 million.
Commenting on the deal, Barry's director, Mr Tony Barry said Batchelors ideally suited the company's needs.
