Premier Foods PLC has cemented its place in the breakfast market with the acquisition of FUEL10K for an enterprise value of £34 million.
Added to larder cupboard staples such as Mr Kipling and Ambrosia. Alex Whitehouse, FUEL10K has been identified as an "ideal platform" for Premier's category expansion.
This strategic move follows the company's successful integration of The Spice Tailor, a previous acquisition that yielded increased revenue and profit. Recent trading updates for Premier Foods have been favourable, with a year-on-year group sales increase of 21.1%, largely attributed to its grocery and sweet treats categories.
Premier shares were up 0.7% at 114p in early trading. Investment bank Peel Hunt said the stock remains good value at just 9 times earnings as it set a price target of 157p. Analysts at Shore Capital added: "We welcome the deal, demonstrating the material miss-rating of a fine firm."