DAVY VIEW

Greencore has enhanced its food-to-go (FtG) salad capabilities via the £56m acquisition of Freshtime, a supplier of snack salads and prepared vegetables to the UK grocery and convenience trade. The deal provides a good foothold in the salads adjacency, while the multiple of 8x EBITDA reflects high-single-digit operating margins and a solid growth profile. Greencore is familiar with the business given its existing distribution relationship. We see 3%+ upside to our FY2020 EPS. Given market fragmentation and a strong balance sheet, we expect bolt-ons to become central to Greencore’s capital allocation playbook.