The consumer goods giant Unilever sold its Ambrosia custard and rice pudding brand yesterday to Premier Foods, the maker of Sun Pat peanut butter and Branston pickle.
Details of the deal were undisclosed but it is thought to be worth up to £105m. Unilever's Brown & Polson division, which makes cornflour, is also part of the transaction. The combined businesses have sales of about £60m a year.
Premier, which employs about 3,000 people, is owned by the private equity firm Hicks, Muse, Tate & Furst. Premier plans to combine Ambrosia and Brown & Polson with its existing food brands, which include Sarson's Vinegar, Typhoo Tea, Loyd Grossman recipes, and Crosse & Blackwell.
Ambrosia pioneered rice pudding desserts in the 1930s and was the first company to sell rice pudding in cans in the UK. It is now the leading milk-based dessert brand in the UK and 75 per cent of all households buy Ambrosia products. It became part of the Unilever stable when the company bought Best Foods in 2000.
But Unilever is trying to slim down its portfolio by about 110 brands to help fund growth and signalled that it wanted to dispose of Ambrosia in July this year.
A spokesman for Unilever said yesterday: "Ambrosia could be considered one of our local jewels as it is a very popular brand, but it is very much a UK business and we felt its interests were best served with a UK food company. Our focus is very much on larger, global brands and we want to give more support to them."
The strategy to slim down Unilever's Path to Growth, however, is proving slow at delivering results and the company has warned that even its global products have suffered in the past year. Last month it revised down its sales forecasts for the year for the second time.
Ambrosia employs about 200 people in Lifton, Devon. Unilever said yesterday there would be no redundancies as part of the deal.
Lyndon Lea, a partner at Hicks, Muse, Tate & Furst, said: "The acquisition represents a continuation of our buy and build strength in the food sector. This is our fifth strategic add-on acquisition through Premier and continues our initiative of building a branded, category-focused food company."
The Hicks, Muse, Tate & Furst portfolio, which has about $50bn in assets, included Yell, the directories publisher that floated in September at £1.2bn.Reuse content