8 September 1995

Waterford Foods in £128m takeover

IRISH dairy company, Waterford Foods, has announced a £128m takeover of The Cheese Company.

With its existing UK operations, the deal will elevate Waterford to the fourth largest UK operator, with a combined turnover of over £480m.

The Cheese Company runs five factories: Taw Valley, Devon; Appleby, Cumbria; Lockerbie, Scotland; Melton Mowbray, Leics; and Malpas, Cheshire. It also operates the largest cheese prepacking facility in the UK, at Oswestry, Shropshire.

Dairy farmers who currently supply milk direct to The Cheese Company will not be affected by the deal. Roger Davenport, managing director, said: "We will continue to trade as The Cheese Company, which will be a subsidiary of Waterford.

"We have developed relationships with our producers. They have contracts with the individual creameries and that will continue." Mr Davenport and the senior management team of The Cheese Company will remain with the business.

The Cheese Company was formed in 1992 in a £96m management buyout from Grand Metropolitan. It is one of the two largest cheese makers in the UK, making about 20% of the UKs Cheddar, and is the largest supplier to the retail sector. The company also makes a range of dairy food ingredients and owns and operates Cuisine Foodservice, a nationwide chilled food distribution company.

Annual turnover of The Cheese Company to Oct 1, 1994 was £291m with operating profits of £12m. Unaudited figures for the nine months to July 1, 1995, show a profit of £12.7m on a £240m turnover.

The takeover offers Waterford Foods a major access route to British retail markets. Its current product portfolio includes cheese, yogurt, fromage frais, liquid milk, and butter. A spokesman said Waterford was firmly committed to the development of a substantial, high value added international dairy-based food and food ingredients business.

Matt Walsh, managing director of Waterford Foods, said the deal offered considerable opportunities. "Our customers will be able to buy from a much broader range of products from Ireland and the UK and will be able to share in the results of even more product development. Our farmers and other suppliers will also benefit from access to these larger markets."

The combined operations in Ireland and the UK will process 2.3bn litres of milk a year. Completion of the acquisition is subject to regulatory approvals and the consent of Waterford Foods shareholders. &#42