Yorkshire Food buys 80% of US dried fruit business

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YORKSHIRE FOOD, the nuts and raisins processor and distributor, has paid pounds 17.8m for an 80 per cent stake in the dried fruit part of the US canned fruit company Del Monte, writes Robert Cole.

It is the first acquisition Yorkshire has made since coming to the stock market in March this year. On flotation, investors were told that the company would have an aggressive policy on acquisitions.

The dried fruit part of Del Monte makes up about 4 per cent of the whole company, which is unrelated to the fresh fruit trading group owned by the crashed Polly Peck empire.

Del Monte has retained a 20 per cent stake so that it can have some say in the handling of its brand name.

In the wake of the deal analysts upgraded their profit forecasts for Yorkshire. They estimate that it will make pounds 5.3m pre-tax for the year to 31 December, revised up from pounds 4.3m. Last year it made pounds 2.7m.

Yorkshire is issuing shares to raise pounds 11.4m of the acquisition price. The rest of the price will be paid for out of increased borrowings. The group expects to have year-end gearing of 41 per cent.

The shares, which will broaden the company's equity base by a quarter, will be placed and offered publicly at 114p. The shares rose 4p yesterday to 129p. They were floated at 110p in March.