Irrigation products maker Jain Irrigation that has also built a presence in the niche areas of processed foods business to become an agro products company, has acquired 80% stake in Sleaford Quality Foods Limited (Sleaford) in the UK for an undisclosed amount.
Sleaford is a supplier of ingredients to food industry since 1968 and is located in East Midland region of the UK, making it ideally situated for distribution and sale in the country. It has one manufacturing facility in Sleaford town in Lincolnshire County and has total full time workforce of around 90 people.
The deal which also includes Jain Irrigation getting a call option to acquire the balance 20% stake based on an earn-out model by 2014, gives the Indian firm an opportunity to forward integrate its existing business with the food chain. More importantly, it extends the scope of its processed foods division and partly decouples itself from policy and monsoon driven demand for irrigation products.
The share price of Jain Irrigation was trading at Rs 222.4 at 2:42 pm today, down by 2.86%.
The move will help the existing food division of Jain Irrigation which is into mango pulp and puree besides dehydarted onions to get direct access to a large market with value added products. For the year ended March’10 Jain Irrigation derived around 13% of revenues from these two product units and grew the businesses 25% last year to just over Rs 400 crore led by strong growth in the mango pulp and puree business.
Sleaford’s product range covers a large spectrum of food ingredients including dehydrated vegetables, spices, herbs, dehydrated fruits, soup mixes, pulses, canned vegetables, etc. It sells its products to multinationals and other food companies under its own brand name or private labels.
No major changes are planned regarding personnel and the management leadership of the business, the company said on Wednesday.
"Sleaford’s commitment to produce high quality products coupled with its excellent reputation for customer service will greatly help in opening-up of large opportunity for our food processing division" said Anil Jain, Managing Director of Jain Irrigation. He added: "We endeavor to add value in Sleaford by providing large source base from India and other parts of the world where Jain Irrigation has its strong presence."