New world for Hovis after ABF deal comes out of the oven
Confirmation of acquisition by Kingsmill owner leads our Rainmakers round-up
Confirmation of a big deal this morning has come from Associated British Foods (ABF), which has finished baking its acquisition of Hovis Group.
The purchase from Endless, reportedly valued around £70m, has been proving for a while.
And, with a nod to Dvořák, it's a New World for the food manufacturer after five years' ownership by the Leeds-based private equity firm.
(Home bakers weren't the only ones to get briefly excited about bread during lockdown.)
ABF already owns Kingsmill maker Allied Bakeries, which has been struggling for some time. The loss-making business also lost a major contract with Tesco earlier this year.
The Hovis takeover is likely to be scrutinised by the Competition and Markets Authority (CMA) as the combined business would surpass Warburtons as the largest in the branded wrapped sliced bread sector, and the duo would then share around three-quarters of the market.
ABF's chief executive George Weston was enthusiastic but prosaic about the potential, choosing not to describe the deal as the best thing since sliced bread.
"This transaction will create a UK bakeries business that is both profitable and sustainable over the long term," he said.
"Supporting the Hovis and Kingsmill brands with well-invested and efficient operations will also enable innovation and growth. This solution will create value for shareholders, provide greater choice for consumers and increase efficiencies for customers."
AJ Bell's Russ Mould warned of the danger of the regulator becoming involved in the deal, which could become a big distraction from the central challenge for Hovis and Allied Bakeries: "Neither is making money right now."
ABF will need to put some dough to work and hope it rises.
The Hovis purchase is the latest example of how the summer slowdown hasn’t happened in the usual way this year.
That’s partly because the sluggish, uncertain market didn’t have much momentum to ease up on.
The drawn-out negotiations and faltering progress are a symptom of the struggles facing dealmakers. Endless themselves had teed up another exit, going worldwide for a buyer of American Golf, but instead found themselves stuck in the trees…
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The transaction sees growth investor BGF slip the bolt on its four-year investment, having first backed Brisant in 2021.
Founded in 2013 by Steve Stewart, with Nick Dutton joining a year later, Brisant has built a strong reputation for innovation in the fenestration and locksmith sectors.
Its product portfolio includes the Ultion Lock and Ultion Smart, designed to keep intruders firmly on the outside.
BGF’s investment helped Brisant strengthen its leadership team, oil the hinges on its supply chain, and bolt on new acquisitions.
“BGF has been a true partner helping us to scale operations to meet growing demand,” said Nick Dutton, former director at Brisant Secure. “Their input across leadership, strategy, supply chain and acquisitions has been transformational, and has positioned us for long-term success.”
With Allegion now part of its armoury, Brisant’s ambitions look firmly secured.
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UPD, which is backed by Paris-based private equity and investment group, Eurazeo, is a major player in the French premium pet food market and serves over 285,000 customers.
IPN, which has been in business for more than 100 years, is no small morsel itself, as it reported revenues of £174m in its 2024 accounts. And last year, we reported on how the Thirsk-based firm was making an investment of more than £30m in new technologies designed to significantly expand its technical capability, potential product range and capacity.
IPN is itself controlled by private equity investor CapVest Partners. Explaining its hunger for its newest acquisition, IPN says UPD represents a strong strategic addition and brings with it a "sophisticated, proven e-commerce platform with significant international growth potential."
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Low Carbon Energy, founded by Ged and Maura Ennis, has built a strong reputation within the solar sector and its client portfolio includes BMW, Porsche, Co-op, Boeing, Drax Power, Tata Steel, Wickes, United Utilities, and the NHS.
County Monaghan-based Activ8 Energies is 50% owned by SSE Airtricity, an Irish subsidiary of SSE. It has recently worked on a £3m solar farm installation at Liverpool’s John Lennon Airport, which goes live next month and will provide 25% of the airport’s electricity.
It said the move for Low Carbon Energy comes as it eyes more UK commercial infrastructure projects, linked to the Government’s ambition to triple the UK’s solar capacity by 2030. And it aims to become the biggest commercial and industrial renewable energy provider in the UK.
Ciarán Marron, CEO of Activ8 Solar Energies, said: “This acquisition marks a transformative moment for Activ8 as we accelerate our UK growth ambitions.
“Together, we’re poised to scale nationwide and play a central role in supporting the UK’s transition to a low-carbon economy.”
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We are hosting Rainmakers Lunches soon, an opportunity to network with leaders from the corporate finance sector.
These events will bring together the region’s Rainmaker community to discuss the deals market in 2025 and celebrate your successes over the last 12 months.
We will be joined by our Rainmaker of the Year in each city.
Joining us in Leeds on the 23rd of September will be Rainmaker of the Year – Paul Mann, partner in the corporate team and head of the private equity team in the UK at Squire Patton Boggs.
Also attending is the Changemaker of Year, Alexandra Fogel, partner and head of private north at EY, who scooped the award at our Rainmakers awards in June.
Chris Handy, who is Partner and Head of West Midlands for LDC, alongside him we will have Richard Swann from Inflexion, who won our Changemaker of the Year award. on the 2nd of October.
Also on the 2nd of October in Manchester we have Rainmaker of the Year – Michael Loudon, partner and head of the North West at Clearwater.
Alongside him will be our Changemaker of Year, Greg Holmes, from Palatine, who scooped the award at our Rainmakers awards in June.
Also providing insights will be Claire Alvarez of private equity firm Foresight, who won the finance leader category at the Leadership Awards 2024 and shortlisted for Rainmaker of the year.
Laura Wiggins, our Rising Star, will be on maternity leave and we send her our very best wishes.
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