A new study by industry analyst Plimsoll has suggested that one in eight companies in the UK fresh produce industry could change ownership as a result of the current economic climate.
According to the study, entitled 'Plimsoll Industry Analysis – Fresh Produce', a number of cash-rich groups are waiting in the wings to takeover other companies, with the market set for a prolonged period of consolidation.
'I am sure any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market,' said report author David Pattison. 'With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyers market out there for cash rich companies.'
In the report, Plimsoll picked out 85 companies with a large cash reserve that are now in the position to buy large chunks of market share at low prices, with Pattison describing them as 'like kids in a sweet shop'.
'The UK fresh produce market is still widely regarded as one of the UK's most fragmented sectors,' he continued. 'In our report we analysed 932 companies with a turnover of over £1m per annum and have picked out 119 that are primed to be taken over.
'Buying one of these businesses represents a massive opportunity for someone to enhance their share of the market,' Pattison added. 'Either way, the market is set for a wave of takeovers in the next months.'
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