The acquisition of Fired Earth by the Aga Foodservice Group, for £29.5 million sterling from PPM Ventures Ltd, will not have any immediate impact on the company's Irish operations, according to Aga's group finance director, Seβn Smith.
While Aga plans to expand Fired Earth internationally, he says there are no "plans on the horizon" to add to the number of Irish outlets.
Campbell and Cooke will continue to be the sole agent for Aga in the Republic of Ireland, where a record 400 Aga cookers were sold last year. "We are having another very good year so far and are more than happy to continue working with Campbell and Cooke," Smith says.
The move to purchase the paints and ceramics chain Fired Earth is part of an ongoing plan to attract "a younger professional audience" and to increase Aga's accessibility to consumers. There are reported plans to "cross-fertillise" both brands in their respective stores.
Both Fired Earth and the Aga Foodservice Group are well established, high-profile brands in the UK with comparable customer bases and complementary distribition channels. However, given that the only Fired Earth store in Ireland, situated on Lower Ormond Quay in Dublin, is one of the smaller stores in the chain, it would probably "not fit much of an Aga display," says Smith.
In 1998 Fired Earth - which was founded in 1983 and has 55 retail stores - was acquired for £20.6 million by PPM Ventures, the private equity arm of Prudential. The deal will increase Aga's access to the south-east of England where Fired Earth is particularly strong and in turn will open up many of Aga's 87 showrooms and shops to the Fired Earth range.
Last year, Fired Earth reportedly made operating profits of £2.1 million on a turnover of £18 million. The £29.5 million paid by Aga to purchase Fired Earth comprises £23.4 million in cash and £6.1 million in redeemable loan notes, of which £3.3 are convertible into Aga Foodservice shares at 250 pence per share.
The purchase was Aga 's first major acquisition following the sale of its pipes business in March this year for £786 million to Belgian company Etex. The group, formerly called Glynwed International, is one of the UK's largest manufacturers of household cooking ranges, sold under the names Aga, Rayburn and Leisure.
Agas, which sell in Dublin for between £7,000 and £10,000 (€8,888 to (€12,697) were traditionally aimed at a rural market and appealed to a 40-plus age group. "We are increasingly pushing towards a younger market of professionals in their mid to late 30s up to mid 40s."
As well as cookers and stoves, the Aga Foodservice group also manufactures sinks and gas-fired heaters. Their food service range includes commercial catering equipment and supermarket bakery equipment.
