2 Sisters entrepreneur set to take major stake in Yorkshire food group
Butcher and food retailer Crawshaw has entered into a “transformational” supply chain partnership with the 2 Sisters food group, owned by entrepreneur Ranjit Boparan.
The deal will see Boparan become a significant shareholder in the Crawshaw business.
He is expected to invest £5.1m for a 29.9% stake in the Rotherham-based business, with an option to allow him to acquire a further 20.1% of the business, bringing his stakeholding into the majority.
Invest Co 1 Limited, a vehicle 100% controlled by Boparan Private Office, and Stephen Henderson, chief financial officer of BPO will acquire 33,794,490 new shares in the group.
Richard Rose, non-executive chairman of Crawshaw will step down after 11 years in the role, with Jim McCarthy, former CEO of Poundland taking over. He was previously CEO of T&S Stores Plc for eight years before selling the business to Tesco for £500m.
It will allow Crawshaw access to more poultry products, and an initial three-year supply agreement will allow Crawshaw to acquire fresh meat and other products from 2 Sisters, with the aim of reducing wastage.
AIM-listed Crawshaw also reported its full year results today. It posted a revenue increase of 19% to £44.2m for the year to 29 January 2017, up from £37.1m the year before.. It said this was driven by store expansion programme. However losses increased from £344,000 to £1.4m during the year as it looked to invest in growth.
Noel Collett, chief executive of Crawshaw Group said: “This is a transformational partnership for the Crawshaw Group with a significant opportunity to offer a greater range and better availability to our customers. This new relationship provides a catalyst to our accelerated growth, both in sales and profitability.”
“We very much welcome the 50/50 equity split as it reflects the symbiotic nature of the partnership and aligns both our interests to achieve maximum shareholder value. The two-stage subscription including conditional warrants will allow the commercial benefit to be demonstrated as part of the process.”
Ranjit Boparan, chief executive of Boparan Holdings Ltd, said: “This is a great opportunity that complements our corporate social responsibility policy and our aim to reduce levels of quality food that would otherwise go to waste. Our businesses have a significant number of opportunities to work through together in the coming weeks and months.”
Richard Rose, non-executive chairman of Crawshaw Group, stated: “Having worked on this partnership for a while and now seeing it being concluded, I feel that after 11 years as Chairman it’s time for me to make way for someone new to take the business to a significantly higher level.”
Jim McCarthy, chairman-elect of Crawshaw Group, added: “I am delighted to be joining Crawshaw Group at such a transformational time for the business. There are clearly significant opportunities for further growth, and together with the 2 Sisters Food Group, we have the ideal partner to create value for both businesses.”
The deal is subject to shareholder and takeover panel approvals, which have proved tricky for Boparan in the past. His deal to acquire Bernard Matthews was investigated by the Competition and Markets Authority last year.
It is also not Boparan’s first connection with Yorkshire. He acquired Fox’s Biscuits in 2011 from Northern Foods. It is due to be sold in a £350m deal by a consortium of financiers.
