Food manufacturer Jacob Fruitfield has bought a specialist producer in a deal said to be valued at over €1 million.

The company yesterday said that it had completed the acquisition of the Real Irish Food Company, a niche manufacturer of jams and sauces based in Drogheda, Co Louth.

Neither side revealed the purchase price, which is being kept confidential on "competitive grounds".

However, industry sources valued the deal at around €1 million on the basis of the Real Irish Food Company's sales, which are €1 million a year.

According to its accounts, its assets, including its premises in Drogheda, came to just over €1.1 million.

However, the company had been losing money. At the end of March last year accumulated losses were almost €481,000, up from €320,000 12 months earlier.

Accounts for the business filed with the Companies Registration Office (CRO) state that on March 31st, 2004, liabilities exceeded current assets by €277,200.

A note to the accounts states that its ability to continue as a going concern depended on it trading profitably in the future.

The directors, Bronagh Conlon and Seán MacDhuibhinse believed that it was appropriate to prepare the accounts on the basis that the company would continue as a going concern.

Jacob Fruitfield already distributes Real Food Company products. It has bought the business to drive growth in sauces and preserves.

In a statement yesterday it said it would use the Real Irish Food Company's Drogheda business to develop and manufacture new products under its existing brand names.

Jacob Fruitfield had sales last year of €105 million and employs 500 people.