Cranswick acquires Crown Chicken, calculates potential of feed business
Adam Couch, CEO of Cranswick, told FeedNavigator: “The feed production side of Crown [Chicken Ltd} is important because it is part of [the] overall business and we will take our time to assess it. The plan is to grow the whole business but it is early days so we need to fully explore what the opportunities are.”
Couch said the purchase of Crown, announced today, fits with Cranswick's strategic ambition to build on the success of the acquisition of premium end poultry processor, Benson Park, in October 2014. “It [Crown] is vertically integrated, profitable and has a strong management team,” added the CEO.
Crown is based in East Anglia, where it processes 450 to 500K chickens on a weekly basis. It is a fully integrated feed milling, poultry breeding, rearing and processing company.
UK market analysts, Shore Capital, rank it as the sixth largest UK poultry processor by volume.
Darren Shirley, analyst with that equity research firm, commenting on the acquisition said: “With Cranswick’s Benson Park currently handling the equivalent of around 250k birds per week, the acquisition represents a material increase in Cranswick’s poultry scale and capability.
“We view the acquisition as highly complementary to [the] management’s medium to long-term strategy to drive growth through the development of new product channels in both pork and other proteins.”
Last year, Crown Chicken generated sales of £83.8m and had an adjusted EBITDA of £6.6m.
Efficient feed milling operations
Cranswick said that Crown’s milling business is a “well invested and efficient” operation that satisfies all of the business’ own feed requirements as well as supplying feed to other pig and poultry producers in East Anglia.
Its feed operations, estimated Shirley, already get £4 to £5m worth of business from Cranswick’s pig rearing business, Wayland Farms.
The equity analyst reckons there is scope for significant capacity development at the poultry processor: “Crown’s facilities include around 20 acres of land across East Anglia, and we believe with a relatively modest investment Cranswick could materially build capacity over-time at [its] Weybread processing facility.”
Members of Crown’s management team, Nigel Armes, milling director, and Matthew Ward, agricultural director, will remain with the business. Shirley said Cranswick will add considerable know-how in new product development (NPD) within the Crown set up.
The analyst added that Benson Park co-founder, David Park, is also set to play a leading role across the combined poultry activities, adding his “significant commercial expertise.”
