Nut butter brand Meridian is close to a £50m takeover, with SHS Group poised to win the highly competitive auction, The Grocer understands.

Northern Irish consumer goods company SHS is believed to be in exclusive talks with 3V Natural Foods, which owns Meridian and premium soft drinks brand Rocks, with a deal expected to be sealed in the coming weeks.

The owners of Meridian hired corporate advisors at Spayne Lindsay last year to find a buyer for the group as demand for nut butter continued to explode.

A handful of PE houses lodged bids of more than £40m for the business, but the trade player was able to offer a significantly higher price, with a double-digit EBITDA multiple, according to industry insiders.

The 3V management is expected to retain a sizeable chunk of the business on completion. Irish-listed Glanbia,, the world’s largest sports nutrition business, was also involved in the late stages of the process, City sources added.

“This has been a closely watched deal,” a dealmaker source said. “The process was extremely competitive across trade and PE, all keen to get to their hands on a rapidly growing company. There were a few PE offers on the table but trade came in with a much better offer than PE could get to.”

Northern Ireland’s largest family-owned food and household goods group, SHS counts dozens of brands in its portfolio, including Bottlegreen, Shloer, WKD, and Merrydown cider and Farmlea rice pudding, and is also a market leader in own-label herbs and spices.

The group also distributes well-known brands such as Jordans, Ryvita, Nivea, Finish and Mars Drinks in selected outlets and channels. Sales jumped over 23% to £467.7m in 2016 thanks to innovation, brand investment and business wins, which it wants to support through complementary acquisitions.

Meridian, which makes most of 3V’s sales, has grown rapidly in the past few years, with group revenues up 30% to £21.6m in the year to 30 September 2016, slowing from a 76% jump in the previous 12 months, according to the latest accounts. Sales value at the nut butter brand soared 52.5% to £12.3m in 2017 [Nielsen/The Grocer Top Products Survey].

Nut butter is seen more and more as a high protein snack rather than just a spread, with peanut butter in particular increasingly marketed on health grounds.

Whole Earth has also benefited from the growing trend, with retail sales up 18.6% to £23.8m in 2017 [Top Products].

All parties declined to comment.

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