Convenience grocery chain Heron Foods has been bought by discount retailer B&M in a deal worth up to £152 million.
The Melton-based family firm, which operates 251 stores across the north of England and the Midlands, sells ambient, frozen and chilled foods, including frozen fruit and vegetables, while B&M sells a wide variety of products, including furniture, household appliances and toys.
B&M said it planned to develop and launch a “discount convenience grocery brand” following the acquisition, the Financial Times reported. The chain added that convenience stores were a growth area in the grocery business, but said premium pricing had driven much of this growth.
Alongside Heron’s management team, B&M plans to expand the Heron business, adding 10 to 20 new stores a year, according to Hull Daily Mail.
B&M is reported to have paid Heron Foods £112.1m today, with a further £12.8m to be added depending on the company’s financial performance up to the end of March 2019.
Commenting on the deal, B&M’s chief executive Simon Arora said: “B&M is already the UK’s leading general merchandise discount retailer, serving four million shoppers per week.
“The addition of a complementary, proven discount convenience grocery brand to our own structural growth story gives the combined business an even longer, exciting growth runway.”
The deal follows other recent acquisitions in the convenience food market, with Tesco buying convenience store operator Booker in January and Morrisons agreeing a long-term supply deal with McColl’s on Monday this week.
David and Andrew Heuck, who manage and own Heron Foods with their brother Michael, told Hull Daily Mail: “We are delighted to be joining forces and working with B&M.
“Both companies share a vision to bring great value to customers and the combination of Heron’s skills with the expertise and resources of B&M will mean the creation of a potent new force in the structurally growing convenience sector.
“Today’s transaction secures for Heron’s loyal and hardworking workforce a perfect long term home within the B&M Group and provides an exciting platform for the roll-out of more Heron stores nationally.”