Sausage maker Cranswick acquires chicken producer Crown in £40m deal
Sausage maker Cranswick has flown further into the poultry market with a £40 million deal for an East Anglian chicken producer.
The Hull-based firm has snapped up Crown Chicken as it ramps up plans to expand its reach outside the pork business.
Crown - and its subsidiary Crown Chicken Limited - breeds, rears and processes fresh chicken for grocers and manufacturers across the UK.
Cranswick's decision to bolster its poultry business comes after it bought premium cooked chicken producer Benson Park in October 2014.
Shares stepped up 4.8% as investors welcomed the deal.
Chief executive Adam Couch said the move marked an excellent opportunity for the firm to develop its UK poultry business.
He added: "This acquisition represents important progress in our long-term growth strategy of developing new product channels in both pork and other proteins."
Crown, which employs about 400 people at sites in Norfolk and Suffolk, recorded revenues of £83.8 million to December 31 last year.
The company also owns a milling operation, creating animal feed for pig and poultry firms across East Anglia.
The deal will see Crown's chairman David Thacker retire from the business, while mill director Nigel Armes and agricultural director Matthew Ward will stay on at the firm.
Cranswick said total full-year sales volumes were up 12% to March 31 2016, when it made a fourth-quarter update to the market last week.
Last year, the FTSE 250 firm recorded revenues of £1 billion and pre-tax profits of £52.8 million to March 31 2015.
Sophie Jourdier, analyst at Liberum, said the deal "gives Cranswick a foothold to expand into poultry processing, adding another leg to the company's growth outlook beyond its market share gains and rising exports in pork".
Shore Capital analyst Darren Shirley said the move may see Cranswick bolster Crown's operations.
He added: " Crown's facilities include 20 acres of land across East Anglia, and we believe with a relatively modest investment Cranswick could materially build capacity over time at the Weybridge processing facility."