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Bakery brand Hovis has been acquired by private equity firm Endless for an undisclosed sum, the company has announced this morning.
The 134-year-old bakery brand has been sold to Endless by joint owners Gores Group and Premier Foods.
A statement this morning from Hovis said that significant investment by Endless will support the existing management team deliver their future plans and is the third investment by the private equity firm in recent times in the UK food sector.
Hovis, it said, has seen a significant turnaround in the last four years, and will continue to drive its strategy focused on delivering great quality products, customer value and service.
The sale will allow Hovis to focus on delivering the next phase of growth by tapping into growing consumer demand for “high quality, relevant and nutritious products”, supported by investment in the brand and infrastructure of the business.
Hovis CEO Nish Kankiwala commented: “Based on our extensive engagement with Endless 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.”
Premier Foods in a statement to the stock exchange this morning said the transaction closed and completed late on 5 November and will generate proceeds of £37m due to the group, including the repayment of outstanding loan notes and accrued interest.
Premier’s 49% shareholding in Hovis had previously been fully written down in 2016 and the transaction “strengthens the group’s financial position as it continues to improve its leverage profile”.
Hovis’ majority owners Gores Group tasked investment bank RW Baird with handling a sale earlier this year, having led a turnaround after buying a majority share from Premier Foods in 2014.
Endless was tipped as one of a number of suitors for Hovis, which also included Italian food group Newlat Foods and fellow private equity firms Epiris and Aurelius Equity Opportunities.
Houlihan Lokey advised Endless on the transaction.
Morning update
The monthly Grocer Price Index published today shows a small uptick in annual supermarket price inflation from zero in September to 0.2% in October.
Morrisons actions to slash prices across hundreds of products has driven the supermarket into annual deflation and retake the position of the best of the big four supermarkets on price inflation.
The Bradford-based supermarket recorded annual deflation of 0.4% in October across more than 12,000 SKUs analysed by the Grocer Price Index, collated by Edge by Ascential.
Tesco moved back into annual inflation of 0.9% having been in deflation of 0.8% in the previous month, while Asda recorded inflation of 0.2% and Sainsbury’s 0.1%.
Despite the small rise in the overall GPI, the index remains well down on the post-lockdown inflationary high of 2% caused in April amid a sharp cut in the number of promotions as supermarkets focussed on ensuring a stability of supply.
Check out thegrocer.co.uk/finance for full details and analysis of Sainsbury’s share price drop after its interim results yesterday and trading updates from Lancashire Farm and St Austell Brewery.
Yesterday in the City
The FTSE 100 shrugged off yet more uncertainty over the result of the US Presidential Election by ending the day up 0.4% to 5,906.2pts.
Sainsbury’s was one of the day’s key fallers, dropping 5.2% to 198p despite its core profitability being expectations as the City reacted to significant one-off charges relating to the closure of 420 Argos stores which sent the supermarket into a first half statutory loss.
Consumer stocks generally had a slower day than Wednesday, with fallers included Nichols, down 3.8% to 1,020p, Glanbia, down 3.5% to €8.32, British American Tobacco, down 3% to 2,500p, Imperial Brands, down 2.6% to 1,237.5p, WH Smith, down 2.2% to 1,035p, Kerry Group, down 2.1% to €105.90 and AG Barr, down 1.9% to 465.5p.
The day’s risers included Hotel Chocolat, up 8.1% to 335p, Devro, up 6% to 165.2p, PayPoint, up 3.4% to 522p, Just Eat Takeaway.com, up 3.2% to 9,290p, Tate & Lyle, up 3% to 652p, Compass Group, up 3% to 1,133p and Greggs, up 2.6% to 1,352p.
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