Egg Business Noble Foods Hoists £400m Price Tag10 April 2013
UK - The owners of Noble Foods are considering a £400 million sale of the UK’s largest egg producer business.
Farmers Peter Dean and Michael Kent, the joint owners of the Tring, Hertfordshire-based business, are poised to begin discussions about the potential sale with private equity buyers and overseas rivals. According to Business Sale Report, private equity firms, including CapVest and PAI, could be in the first round of bidding.
Noble collects about 72 million eggs from 350 farms and delivers most of them to supermarkets. Established for almost 100 years and holding about 46 per cent of the egg market, the business also operates the brands Happy Eggs and Big & Fresh. Happy Eggs, which has been subject to investment, has been launched in the US.
Noble foods was formed by the merger of Deans Foods and its larger rival Stonegate Farmers in 2006. It is headed by Michael Kent, who owns 50 per cent of Noble. It bought the luxury dessert brand GU three years ago, which is not included in the sale.
For 2011 the business posted sales just short of £600 million, but with pre-tax profits halved to £11.9 million from £22.7 million the year before. It has been a tough year for egg producers, Noble Foods explained, and attributed the low figures to a surplus of eggs and the rising prices of feed for the chickens. Tighter EU regulations have also affected the whole industry.
The UK egg producing market is worth about £800 million and has about 2,000 egg farmers. About 9.7 billion eggs are laid every year, half of which are free range, organic or barn.
Farmers have been struggling to claw back the rising costs of feed for their livestock, a situation aggravated by the droughts in America last summer badly reducing crops.
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