Avonmore buys Dairy Crest arms

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The Independent Online
AVONMORE stepped up the march of Irish food groups into the UK market yesterday, buying the Midlands and Western divisions of Dairy Crest for pounds 20.5m, writes John Murray.

The purchase of the 39-million-gallon milk business brings Avonmore's UK volumes to 85 million gallons, making it the fifth largest supplier in the country.

It follows similar moves by other Irish agribusiness companies. Avonmore is already the biggest milk supplier in the Greater Birmingham and West Midlands region. It has spent more than pounds 100m on acquisitions over the past five years.

The Dairy Crest businesses sold made about pounds 4.6m on turnover of pounds 87m last year, according to unaudited figures accepted by Avonmore. Their net book asset value was independently assessed at pounds 19.7m.

Pat O'Brien, group managing director, said the comparatively low price paid by Avonmore reflected the uncertainty in the market as deregulation of milk supply approached.

'We are comfortable with the changes that will bring, and we believe we can manage them to our advantage. The market in Ireland has been free from statutory control for a century, so our experience will stand us in good stead in Britain.'

Avonmore shares rose 7p to 150p.