11th Feb 2022 11:19
(Alliance News) - Shares in Kitwave Group PLC on Friday rose after the food wholesaler said it acquired the entire issued share capital of foodservice supplier MJ Baker Foodservice Ltd for GBP24.5 million.
MJ Baker Foodservice is Devon-based company, offering over 3,500 products.
Kitwave shares were trading 5.0% higher in London on Friday morning at 139.96 pence each.
The Tyne and Wear, England-based company said the acquisition was funded from available existing banking facilities.
MJ Baker Foodservice reported a pretax profit of GBP1.5 million for 2021, on full-year revenue of GBP16.9 million.
As at December 31, MJ Baker had net assets of GBP7.9 million, Kitwave said.
The multiple being paid for the acquisition is around six times the annual run rate of its earnings before interest, tax, depreciation, and amortization, it explained.
Kitwave believes that the acquisition will be immediately earnings enhancing.
The acquisition will be incorporated into Kitwave's Foodservice division, which currently comprises the trading operations of HB Clark & Co Successors Ltd and David Miller Frozen Foods Ltd.
"The acquisition of MJ Baker is an excellent addition to our Foodservice division and expands the group's nationwide reach into the South West," Chief Executive Paul Young said.
By Abby Amoakuh; [email protected]
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