DAVY VIEW

Greencore has announced an agreement in principle to acquire Bakkavor, maintaining its cash offer while increasing the equity component from 0.523 to 0.604 Greencore shares per Bakkavor share. The revised proposal values Bakkavor at c.8% above its prior day closing price (pre-dividend). We continue to expect c.low-double-digit (LDD)% EPS accretion by FY27, underpinned by c.£50m in assumed total cost synergies. Our pro-forma valuation derives a pre-synergy EV/EBITDA multiple of c.7.5x (c.6.6x post-synergy). We maintain that the proposed acquisition will deliver a beneficial outcome for shareholders.