Warburg Pincus-backed Premier Foods to cut 900 jobs

Karin Wasteson
20 November 2012

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Warburg Pincus portfolio company Premier Foods has announced plans to shut down two bakery sites in Greenford and Birmingham next year, in addition to the previously announced closure of its Eastleigh bakery. The decision will result in 900 job losses across 130 distribution routes.

The GP claims the changes are intended to improve the Hovis brand's efficiency, quality and service levels through simplifying its manufacturing and distribution operations.

The charges associated with the proposals are expected to cost approximately £28m and will be reflected in the company's 2012 and 2013 financial statements, though are not expected to have an impact on 2012 trading profit.

Premier was established in 1999 following the public-to-private of Hillsdown Holdings, where Premier was created to manage food-related activities.

Lion Capital (then Hicks Muse & Furst) backed the buyout of Premier Foods in 1999 with an equity investment amounting to around £171m. In 2002 Lion provided further capital to the company. The bread brand was relaunched in 2008.

In March 2009, Warburg Pincus invested £64m in Premier Foods in exchange for a 10.3% stake in the business. The deal formed part of a £404m capital raising for the company which was part of its plan to reduce debt from £1.78bn to £1.4bn. Warburg's Steve Coats led the original deal. The GP increased its stake to 17.7% in August 2009.