PRODUCE Investments has sealed a £15 million deal to buy potato provider The Jersey Royal Company.
Berwickshire-based Produce, a major wholesaler of potatoes itself, is paying £11m while also issuing £4m of new shares.
Alongside that it has raised £6m through a share placing which will help to part fund the acquisition.
The remainder is coming from existing cash resources and an extension of banking facilities with HSBC.
The transaction, which was first mooted in January this year, further involves an option for Produce to buy Peacock Farm, which owns the freehold property of Jersey Royal's main packing site on the island of Jersey, for a price of £6.35m within three years.
The Kent Potato Company, which is owned by Jersey Royal, is also part of the deal. In 2013 the entire Jersey Royal business had revenue of more than £31m but made a pre-tax loss of around £100,000.
Produce, which has its main base at Duns and employs 250 people in Scotland, said it expects the deal to enhance its earnings from 2015.
Barrie Clapham, chairman of Produce, said: "I am delighted we have been able to purchase such a well-known business.
"It takes the company into a very significant sector of the potato market and we are both excited and confident about the future earnings potential.
"This acquisition marks an exciting period for Produce Investments and the employees at both [Jersey Royal Company] and [Kent Potato Company], providing an opportunity to continue to develop a business which combines real food and farming heritage with the demands of modern supply chains and consumer passion for this high-quality brand."
The Jersey Royal Company employs 500 staff at peak times and produces around 25,000 tonnes of potatoes annually. They are grown by 20 farmers over 1,800 hectares of land on the Channel Island.
Jersey Royals are favoured by chefs and known for their distinctive taste, which is created by the soil and growing conditions on the Channel Island.
The potato is thought to be the only fresh fruit or vegetable in the UK to enjoy EU Protected Designation of Origin status, owing to the way it is grown, cultivated and harvested.
Separately, Produce confirmed its packing plant in Shropshire, which employs around 190 people, will close in August.
It said the volumes from that site will transfer to the Scottish Borders and Cambridgeshire.
Previously it indicated that would create around 50 jobs.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article