UK-based Premier Foods will add Quorn, a meat alternative, to its product lineup with an agreement to acquire Marlow Foods from Montagu Private Equity for £172m (€258m).
Last year Marlow Foods sold £79m (€119m) worth of Quorn, its only product. The company made a profit before tax of £4.6m (€6.9). The business has net operating assets of £48.3m at 31 December 2004.
Quorn is made from mycoprotein, a fungi like mushrooms, truffles and morels. Since the product was launched in 1994, it has become the UK's largest meat alternative brand. Over the last five years, Quorn has achieved an average annual sales growth rate ofabout seven per cent, Premier Foods said in a press release. Marlow Foods now offers a choice of Quorn branded products ranging from burgers, sausages and escalopes through to cottage pies andlasagne.
"From its initial launch targeting the vegetarian consumer, Quorn has successfully increased its appeal amongst healthy eaters and those looking to reduce meat consumption," thecompany said.
Quorn provides Premier with a category-leading established brand with high growth prospects to add to its portfolio, the company said. The UK accounts for 75 per cent of Quorn's sales. Sales to Sweden, Switzerland, Belgium and Holland,where it is the brand leader in its category, account for another 21 per cent of sales. Quorn is the number two meat alternative brand in the natural foods sector in the US.
Quorn has a 60 per cent share of the £155m meat alternative category in the UK and a 15 per cent share of the broader £640m meat free category.
"With approximately 70% of households seeking to eat more healthily, Quorn's excellent health credentials mean it is strongly aligned to consumer trends," Premier Foods said.
The company plans to use its sourcing and access to market to boost Quorn's sales. Premier also plans to invest more in the brand.
"This is a fantastic acquisition for Premier Foods.Quorn's strong brand recognition and leading category positions immediately provide Premier with a very strong branded position in an exciting growthmarket," said Premier's chief executive, Robert Schofield.