Deal of the day
Shares in the Cumbrian-based food, agriculture and engineering company Carr’s Group rose by more than six per cent in early trading on 5 September as the company made a major disposal as it accelerates its restructuring programme. As a result of the deal Carr’s is returning £16m to shareholders in a special dividend, equivalent to around 12 per cent of its market capitalisation.
Carr’s, which recently changed its name from Carr’s Milling, is selling its food division to Whitworths for a net consideration of £24.9m. The subsidiary chiefly comprises three flour mills in Fife, Cumbria and Essex.
After the special dividend the remainder of the proceeds will be reinvested in the company’s growing agricultural and specialist engineering businesses.
Speaking about the sale of the business which was once the core of Carr’s operations, chief executive Tim Davies says: “At a time of increasing competition and volatility in the flour market, consolidation is essential and inevitable. This acquisition by Whitworths presents a great opportunity for the food division to continue building on the strong foundations laid over many years.”
While Whitworth’s Martin George suggests that the business has found the right home, saying: “Carr’s Flour Mills Ltd shares a similar history to Whitworths in that it is a long standing business which has received material investment in recent years. The business is a great fit geographically and will give us access to the South East, North of England and Scottish markets that would otherwise not be available and means we have national reach.”