The UK fresh produce industry is cash rich and ripe for an acquisition bonanza, industry analyst Plimsoll Publishing has found in its latest report on 1,000 companies in the sector.
Senior analyst David Pattison said: “It’s time to splash the cash. Our findings come at a time when it’s impossible to pick up a paper, or see the news, without seeing a story about how the credit market is affecting the performance of UK companies and slowing acquisition activity. However, Plimsoll’s acquisition study finds that the UK fresh produce industry is awash with cash, and companies should use this time to go on the offensive and buy up the competition.”
The report found that the driving force of this move in the market is a group of 460 companies who, over the last few years, have built up a stock resource of cash, putting them in a very strong position.
“There is absolute evidence that the rich are getting richer, as the gap between those making massive profits and those missing out has widened in the last few years,” said Pattison.
The report suggests that 2008 is the perfect time to consider an acquisition, but also points out that the profile of acquisition needs to change. “For years, acquisition activity in the fresh produce industry has been driven by distressed fire sales,” warned Pattison. “Our report suggests companies need to look at the wider strategic picture, and spend their money wisely.”
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