James Crean has acquired the Indiana-based poultry business of Kralis Bros Food Inc for $7.5 million (£5.2 million). Kralis purchases and slaughters fowl and sells them in a ready-to-cook state to processors in the industrial and food service markets.
The consideration is being funded by existing bank facilities and cash flow. Kralis has been purchased from three shareholders, who comprise the senior management, and they will be joining the management team of the group's US food division, under a three-year service contract.
Kralis generated "repeating" operating profits of $1.5 million, on sales of $10.3 million, in the year to June 1997, according to Crean. Tangible assets of $2.5 million are being acquired so there will be a goodwill of $5 million.
Crean US suffered from a shortage of light fowl supplies earlier this year, and regards the acquisition as timely as Kralis purchases around 15 million light fowl per annum.
The acquisition "of a stable profit source is an attractive feature" but its "main significance lies in its strategic value to the existing poultry business of Crean US".
The acquisition, Crean noted, fits neatly with the development plans of Crean US in giving Crean a footing in Indiana which is the third largest source of light fowl in the US. Crean US has poultry processing operations in California, Georgia, Kentucky, Mississippi and Indiana.
