Saudi Arabia's Almarai, the largest dairy company in the Gulf region, said it has reached an agreement with Alamar Foods, a master franchise operator for fast food outlets in the region, for acquisition of top regional  company Premier Foods.

Premier Foods is a leading producer of value-added halal products (meat and poultry) to the food services industry in the Middle East and North Africa (Mena) region.

Almarai said it has signed a sale purchase agreement with Alamar Foods to acquire 100 per cent stake in Premier Foods for an enterprise value of SR108 million ($28.7 million).

Premier Foods boasts a 6,000-sq-m, purpose-built meat processing facility and 6,600 pallet multi-temperature distribution centre in Riyadh.

The company, which recently invested in the latest technology and machinery, has tripled its capacity offering a comprehensive range of both generic and bespoke products to over 35 leading international restaurant brands.

This acquisition will further enhance Almarai’s footprint for expansion in the foodservice channel, said the company.

This strategic move comes following the Almarai board approval for a five-year business plan for the period 2019-2023, which envisages a capital investment of SR10.6 billion ($2.8 billion).

This investment programme will be financed through the increasing operating cash flow, and when appropriate through banks, SIDF, ADF and local and international Sukuk programmes, said senior  company officials.

The long-term investment plan of Almarai calls for less expansionary investments and a focus towards more efficiency and sustainability.

The investments will focus on replacement of existing assets; improvement of production capacities and capabilities in farms and manufacturing facilities; distribution and transportation facilities; extension of geographical footprint and the enhancement of innovation and product development capabilities, they stated.

Almarai said this transaction is fully financed from its operating cash flow, and the financial impact of this acquisition will be reflected in next quarter’s results.-TradeArabia News Service

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