Danish Crown has sold its DBC Foodservice business to Woodward Foodservice. The acquisition will create a £500m turnover foodservice group and consolidate Woodward's position as the third largest supplier to the catering industry and a rival to 3663.
Danish Crown vice CEO Carsten Jakobsen told MTJ his company was one of the biggest meat operations in Europe and it needed to concentrate on its core business to develop strength in a consolidated market. "We are the biggest suppliers of pork and bacon to the foodservice industry and will continue to supply the new combined business via our Tulip subsidiary. DBC is simply not a core business for the Danish Crown Group and so we have found a buyer who can secure the future of this business as it will, as a consequence, have the critical mass to be more efficient."
The deal is backed by Woodward's existing investors Baugur and Talden. Debt finance is provided by Lloyds TSB Commercial Bank and Landbansk. The acquisition is part of Woodward's ongoing expansion strategy following a management buyout led by chief executive Ed Hyslop in August 2005.
Hyslop said: "The deal has been done primarily to bring two successful companies together to form a stronger, bigger and better resourced national foodservice operator, capable of servicing all types of customers from small independents to national chains.
"There will be areas of duplication and Woodward is aiming to conduct an accelerated integration process that will identify the areas where restructuring will take place. No decisions have been taken regarding jobs at this stage but it will keep all employees informed about plans."
Woodward supplies food to restaurants, pubs, hotels and schools across the UK. It has an annual turnover of £210m and employs 1,100 people across 15 distribution sites.
DBC Foodservice has a network of 13 distribution warehouses throughout the UK, employs 800 people and has an annual turnover of £200m. After the sale, Danish Crown will continue to deliver a range of meat products to the combined businesses via its UK subsidiary Tulip.