Free-from bakery Promise Gluten Free is up for sale after its private equity owner hired bankers to explore a potential exit.
The Grocer has learned an information memorandum is set to be sent to possible buyers in the coming weeks by Lincoln International, which is running the auction process for Mayfair Equity Partners.
Ireland-headquartered Promise has experienced rapid growth since Mayfair acquired the business in 2017 thanks to a focus on international expansion, particularly in North America. The PE firm has since bolted on two US bakery brands – Rudi’s Bakery in Colorado and Three Bakers in Pennsylvania – to accelerate momentum in the country.
Revenues have grown at 35% or higher in recent years and now stand at more than €60m (£51.3m), with a compound annual growth rate in branded sales in excess of 60% since 2018.
City sources told The Grocer a deal could be worth about £80m (€94m).
Dealmakers expect there to be wide-ranging interest from trade buyers in the US and Canada, as well as from European players looking to gain a footprint in North America. UK-based bakery Finsbury Food, which is searching for acquisitions following a buyout by DBay Advisors last year, was named as an obvious buyer but sources said the high valuation expectation could rule out the group.
“Like bakery rival St Pierre, Promise has done a brilliant job in North America, and in Canada particular, so the process should attract plenty of interest,” one City source said. “Mayfair has also helped expand the offering of compelling products that increasingly appeal to a wider consumer base focused on health preferences rather than just for allergy reasons.”
Founded in 2011, Promise makes a range of loaves, sourdoughs, brioche, bagels, flatbreads and cakes under the Promise Gluten Free, PureBred Gluten Free and Gallagher’s Bakery brands.
In the UK, it counts Tesco, Sainsbury’s and Morrisons, as well as Aldi and Lidl, as customers, while it is the market leader in Ireland and Canada, with the business claiming responsibility for 73% of gluten-free category growth in the former in the past four years and 100% in the latter.
The global free-from market is estimated to be $80.8bn in 2023 and expected to grow at a CAGR of 13.3% to reach $150.6bn by 2028, according to Mordor Intelligence.
Promise and Mayfair declined to comment.
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