Bernard Matthews has announced the sale of its German subsidiary to integrator Sprehe Gruppe, in a deal that will contribute to a reduction of debts at the firm.
It comes amid reports that private equity firm Rutland Partners, which has invested some £30m in the firm since 2013, had appointed Pricewaterhouse Cooper to explore the sale of its stake.
The privately owned Sprehe Gruppe is a major producer of chicken, turkey and pork in Germany.
Bernard Matthews Oldenburg (BMO) is described as a “wholly independent” operation serving the German market with a turnover of €45m/year (£38m/year).
The sale “made strategic sense”, according to Bernard Matthews chairman Alan Jamieson, who said proceeds of the sale would pay down £12m of the firm’s debt.
“The BMO business has flourished in the past few years but has also grown more independent of the UK Bernard Matthews business,” explained Mr Jamieson.
The sale of this non-core business releases capital that will be useful to the UK operation as we continue to rebuild profitability and to invest in the UK’s leading turkey producer and only significant independent poultry brand Alan Jamieson, Bernard Matthews
“It made strategic sense both for the UK group and for BMO to find a new owner who could bring the resource and strength in the German market that could exploit fully the BMO brand and operations.
“The sale of this non-core business releases capital that will be useful to the UK operation as we continue to rebuild profitability and to invest in the UK’s leading turkey producer and only significant independent poultry brand.”
It is expected the transfer will take place in August, subject to clearance by competition authorities in Germany.
Turnover has slid at Bernard Matthews, down from £346m in 2012-13 to £276.7m in 2014-15.
Cuts to operating costs have not been enough to allow the firm to turn a profit over that period, with latest accounts reporting an £860,000 loss before exceptional items.