The group is paying dollars 7.8m in cash for Fresh Western Marketing, which supplies retail and food service customers with lettuce, broccoli and spinach salad mixes under the River Ranch brand name. It also owns the patent for packaging that extends shelf life. A further dollars 25m may be payable depending on performance. Stephen Walls, chairman, said pre-tax profits would have to reach dollars 18m by 31 August 1998 for the full consideration to be paid. In 1992 the group lost dollars 1.6m, although it is expected to have made a profit of about dollars 4.5m last year, on sales of dollars 200m.
Albert Fisher was criticised during the 1980s for its rapid expansion through acquisitions, generally funded by deferred consideration. Mr Walls said that was now the exception, but he was happy in this case. 'If you look at what we have been able to do, it justifies itself. We have been able to buy a company making dollars 4.5m profit for its net asset value.'
He added that because Fresh Western is slightly different from Albert Fisher's existing US businesses, he was keen to keep the management. The deal doubles the proportion of Albert Fisher's business in value-added, pre-cut produce. Fresh Western also has a quarter of its sales in the Far East.
Albert Fisher's shares closed 2p lower at 71p.
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