UK-based private equity firm Endless has emerged as the winner in the race to acquire historic bakery firm Hovis.
The Gores Group and Premier Foods have both sold their respective 51% and 49% stakes in the 134-year-old brand to Endless for an undisclosed sum. However, Premier Foods issued a statement saying it had received proceeds of £37m from the disposal. Analysts had previously speculated that the bakery business was worth between £100m and £150m.
Hovis was put up for sale back in June by the Gores Group which paid Premier Foods £30m in 2014 to take control of the struggling bread firm. Italy’s Newlat Food had been touted as a front runner to acquire Hovis, although several private equity firms were also known to be interested.
In a statement today, Hovis said that the investment by Endless will support its existing management team in delivering their future plans. Since the Gores Group took control, the business has seen a “significant turnaround” despite consumers moving away from traditional bread products.
Hovis stated that it has grown its branded market share in recent years and was well placed to capture further share in the UK’s £4bn bakery category. The company said it plans to focus on tapping into growing consumer demand for “high quality, relevant and nutritious products” that will be supported by investment in the brand and infrastructure of the business.
Accounts filed recently by Hovis at Companies House show the business had seen a slight fall in revenues from £336m to £333.8m in the year to 31 December 2019 amid a “highly competitive” market for bakery products. However, EBITDA has risen from £14.6m to £23.1m.
Commenting on the deal, Hovis Chief Executive Nish Kankiwala, said: “Based on our extensive engagement with Endless LLP over the past several months, it became clear that both parties share a commitment to customers and colleagues and for building on Hovis’ heritage by investing in growing both the brand and product range. This shared vision makes Endless LLP the best shareholder to support our ambitious plans.
“The acquisition will help drive our strategy for growth by bringing both strategic and operational value to Hovis. We are looking forward to working together to execute this strategy and to delivering the next phase of growth.”
Francesco Santinon, Partner at Endless, added: “Hovis is the instantly recognisable British bread brand with a strong and established heritage. We were extremely impressed by the management team and have great confidence in supporting and investing in its future as Hovis looks to achieve further expansion within the bakery category.”
