Premier Foods’ Share Price Spiked 4.8% on the FUEL10K Takeover

The Premier Foods Plc (LON: PFD) share price spiked 4.78% after announcing that it had acquired FUEL10K, a dynamic breakfast brand known for its impressive range of granola, oats, and drinks products. This strategic move signifies a substantial expansion of Premier Foods' presence in the breakfast meal segment.

The acquisition was completed for a total Enterprise Value of £34.0 million. This value is equivalent to an EV/sales multiple of approximately 1.6x based on FUEL10K's revenues, which amount to approximately £21 million.

Premier Foods funded the initial consideration of £29.6 million from its available cash reserves. This represents the initial payment made at the time of the acquisition. Additionally, there is a minimum further deferred consideration of £4.0 million, slated to be paid in the fiscal year 2026/27. 

The final amount of the deferred consideration may increase, contingent upon achieving specific growth targets. The acquisition is expected to be earnings accretive in the first full year of its operation, reflecting its potential to contribute positively to Premier Foods' financial performance.

FUEL10K stands out as a protein-enriched breakfast brand, setting itself apart in a competitive market by offering nutritionally valuable breakfast options. FUEL10K's product line aligns with current food trends and appeals, particularly to a youthful consumer demographic. 

Over the past three years, FUEL10K has consistently achieved double-digit solid revenue growth. This track record of success highlights its appeal and potential for further development under the Premier Foods umbrella.

The acquisition significantly bolsters Premier Foods' presence in the breakfast category, complementing the earlier success of Ambrosia porridge pots. 

Alex Whitehouse, Premier Foods CEO, said: “The acquisition of FUEL10K follows on from our successful integration of The Spice Tailor, where we have increased revenue and profit through the application of our branded growth model. FUEL10K provides us with an ideal platform to accelerate our expansion into the Breakfast category, building on our recent successful launch of Ambrosia porridge pots. Possessing a differentiated category position, with its protein-enriched product range and appealing to a younger demographic, we expect to deliver significant further profitable growth of FUEL10K through the deployment of our successful branded growth model.”    

Premier Foods (PFD) share price. 

The Premier Foods share price spiked 4.78% to trade at 118.30p from Friday’s closing price of 112.90p.