2003 press releases

Northern Foods ("Northern") has acquired 100% control of its associate company, Solway Foods ("Solway"), through the purchase, principally from a family trust, of the 60% of the share capital it did not already own for a consideration of £26.7 million, comprising £24.7 million in cash and £2.0 million of loan notes. Northern acquired its initial 40% holding in Solway in February 2000.

Solway produces fresh chilled convenience foods for sale under the brands of major retail customers, principally Tesco. Its main product lines are sandwiches, sushi, prepared salad meals and pasta salad snacks. It employs 1,400 full-time staff and operates from modern factories at Corby in Northamptonshire and Manton Wood, near Worksop, in Nottinghamshire. A major new extension at Manton Wood, more than doubling the capacity of the manufacturing facility, was commissioned in March 2003.

In the 12 months to 31 March 2003, Solway recorded sales of £67.9 million and an operating profit of £3.4 million. The net assets of the business at 31 March 2003 were £11.8 million, including debt of £7.8 million.

Northern Foods Chief Executive Jo Stewart commented: "This acquisition increases our exposure to a number of fast-growing segments of the chilled convenience foods market, in line with our established strategy. Solway has excellent customer relationships, an impressive track record of sales growth and a strong management team, who will be remaining with the business. We look forward to integrating Solway fully into our Group, maximizing the potential of the new facility at Manton Wood and securing the full benefit of synergies in areas such as productivity and procurement."