Europastry, the Spain-based frozen bakery business, has put its planned public listing on hold, citing market “volatility”.
The plan for the initial publishing offering (IPO) in Spain was only announced in June. A previous intention for a listing in 2007 also never materialised.
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“Although the company enjoyed strong support from a broad spectrum of investors over the past months, the last few weeks have seen increasingly unfavourable market conditions, and heightened volatility, in the context of an election period in Europe,” the family-owned company said in a statement.
“Against this backdrop, Europastry’s management and shareholders have decided to pause the IPO process, and to actively monitor market conditions in order to identify the best window to achieve the success of the IPO for all investors and stakeholders.”
The €1.35bn ($1.45bn) turnover company said last month that it was applying for a listing on the Barcelona, Madrid, Bilbao and Valencia stock exchanges. The IPO was to consist of a primary new issue of shares amounting to around €225m.
A second tranche was also planned by investment firms connected with Europastry’s Gallés family shareholders, namely Exponent, owned by the MCH Continuation Fund under the umbrella of MCH Private Equity, based in Madrid.
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By GlobalDataIndinura, owned by Europastry CEO Jordi Morral, was also part of the secondary contingent, whereby the family would remain controlling shareholders post-IPO. In compliance with listing regulations, the free-float of shares would have been “at least” 25%, the company said in a statement last month.
In cancelling the IPO, Europastry said the public share offering “remains a strategic objective of the company”.
The company said last month that the objective of the IPO included pursuing M&A opportunities and international expansion.
Jordi Gallés, majority shareholder and executive vice president, said at the time: “Europastry is at the next stage of its development and this IPO is the natural way to fund and accelerate our growth strategy to foster our leadership position in the frozen bakery segment, while deleveraging and maintaining a prudent capital structure.”
He added: “Through international expansion, continued product innovations and a value-accretive acquisitions strategy we want to cement our position as a leader in the global frozen bakery market and promote sustainability in the sector.”
Founded in 1987 and headquartered in Barcelona, Europastry has been active in M&A, giving the company 27 production facilities supplying more than 80 different markets.
In 2022, the company bought the frozen bakery business of US-based Dawn Foods and in 2019 invested in Spanish pizza business Casa Bona. The same year it took full ownership of foodservice bakery supplier Ingapan and in 2018 acquired Portuguese business Confeitaria Torres.
With a portfolio taking in bread, pizza, pies, pastries and sandwiches, turnover grew 20% in 2023 for the owner of brands such as Dots, Sophie and Panburger.
Retail accounted for 56% of Europastry’s €1.35bn turnover last year, while the out-of-home channel made up 32% and B2B customers the remainder.
The company generated adjusted EBITDA of €205m and a margin of 15.2% versus 13.8% the prior year, according to the IPO statement.
Organic growth averaged 8.5% from 2014 to 2023, with acquisitions helping to drive a CAGR in turnover of 14.5% over the same timeframe.
