Burton’s Biscuit Co., the UK firm behind brands including Maryland cookies and Jammie Dodgers, is up for sale. The first round of bidding has been completed and rumoured suitors include private-equity firms Apax Partners and CapVest, Canadian fund Ontario Teachers Pension Plan and Fox’s biscuits owner 2 Sisters Food Group. Stefan Kirk of M&A advisors Glenboden suggests another private-equity firm, Bridgestone, which has just bought a biscuit business in Poland, should look at Burton’s, too.
Apparently the sale of Burton’s Biscuit Co. has attracted expressions of interest from around 12 bidders, nearly all of them private-equity players. In secondary buy-outs, it’s very hard to predict the winner; but we think Bridgestone should figure, on the basis of its most-recent acquisition activity.
Go deeper with GlobalData
 |
According to Sky News, potential bidders include Apex Partners, CapVest, Charterhouse and Pamplona Capital. Of that group, only CapVest has a weighting in food manufacturing investments.
That group’s portfolio includes Valeo Foods (grocery), Vaasan & Vaasan (bakery) and FoodVest (frozen; successful exit in 2008). The others’ consumer investments are focused on speciality retail, gastronomy and non-food.
On the basis of strategic rationale, as manifest in recent M&A activity, we believe that Bridgepoint should be a front-runner to acquire Burton’s. If they’re not yet on the long-list, then it’s not too late if it’s only expressions of interest or NBOs.
Bridgepoint has just announced the acquisition of Dr Gerard from Groupe Poult of France. That deal has surprised many insiders in that country, as Dr Gerard is quite small by Bridgepoint’s standards (turnover above EUR50m).
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThat company is focused on private label and reputedly delivers low margins. A more obvious buyer for Dr Gerard was Resource Partners, which is already consolidating the biscuits market in Poland (with the purchases of Delic-Pol and Cuprod).
It seems unlikely that Bridgepoint bought Dr Gerard as a stand-alone investment. Rather we would assume it’s the first step in the construction of a larger entity in Europe; at least all logic would point in that direction.
There’s a precedent for UK investment in biscuit manufacture in Poland, for export back to the UK. McCambridge’s cake division, now owned by NGBI PE, includes a Polish factory focused on the UK market – Cukiernia Mistrza Jana.
Other UK food investors in Poland in recent years, with a significant export focus, include Emig (FJND) and Associated British Foods (grocery). Clearly the Poland-UK axis works in food manufacture, by virtue of lower costs or EU subsidies.
Given that Burton’s is a stable business delivering reasonable margins (see profile), we believe that the reported price expectation is achievable for a 60% branded biscuits business (see valuation); especially if the buyer has the prospect of lowering costs through central European manufacture.
| This Lead’s Valuation | |
|---|---|
| Size (€ mln) | 410 |
| Sector | biscuits |
| Asset Quality | UK no.2 branded and PL |
| Seller | private equity |
| Buyer | private equity |
| P/S | 1,0 |
| P/Ebitda | 10,0 |
| Type | reported price expectation |
| Origination Status | divestment process underway, October 2013 |
|---|---|
| Asset | Burton’s Biscuit Company (UK), leading domestic branded and private label biscuit producer |
| Buyer | candidates are mainly private equity players |
| Seller | private equity managers Apollo Management and CIBC |
| Buyer Rationale | consolidation strategy for European biscuits, further restructuring potential |
| Seller Rationale | acceptable valuation, successful turnaround |
| NBs | Burton’s main brands are Cadbury, Wagon Wheels, Lyons, Maryland, Jammie Dodgers |
