Samworth Brothers has put iconic malt loaf brand Soreen on the auction block to focus on its core range of products, The Grocer has learned.
The Leicestershire-headquartered group is working with long-standing financial advisor Spayne Lindsay to explore a sale of the business.
It could fetch upwards of £75m if the process is a success, according to one City source. Mr Kipling owner Premier Foods, acquisitive confectionery supplier Valeo Foods, Finsbury Food Group – which is on the hunt for M&A opportunities since coming under new ownership – and Warburtons are all expected to take a look at Soreen, along with overseas trade players.
Another option could be a private equity firm backing a buyout by the Soreen management team, led by Mark Simester, another dealmaker added. However, this is seen as a less likely outcome than a sale to a trade buyer.
“Soreen has done very well under Samworth’s stewardship, but it remains the outsider in its branded portfolio of chilled and savoury products, so it’s the right button to press,” the first City source said.
When Samworth picked up Soreen from the McCambridge Group in 2014 it was the group’s first deal in almost 30 years. The move also pushed Samworth into ambient, a new category for the company.
The group has since, with Spayne Lindsay’s help, added West Cornwall Pasty Co and Higgidy to its line-up, as well as a number of food-to-go assets.
Soreen’s retail sales have shot up from about £29m when Samworth took over to close to £60m today. Accounts filed at Companies House, under the Ltd name of Gibbs Croft, showed Soreen revenues climbed 13% to £41m in the year to 20 December 2023, with EBITDA up from £4.7m to £6m.
The brand’s mini snacking loaves boosted volumes in 2023 as demand for on-the-go convenience continued to rise, especially as cash-strapped consumers looked to fill lunchboxes rather than buying more expensive out-of-home options. Soreen has capitalised on the trend with the launch of new lunchbox variants and flavours.
However, the majority of the top-line increase in 2023 came from price hikes to offset inflation.
The latest category report in The Grocer showed Soreen has had a tougher time in 2024 as shoppers cut back on non-staple purchases. Volumes at the brand experienced a 6.7% decline [NIQ 52 w/e 15 June 2024].
Soreen can trace its heritage back to 1920 when Danish creator John Rahbek Sorensen arrived in the UK from Melbourne.
Samworth is now also operating under a new boss after Hugo Mahoney parted ways with the group earlier in the summer, with chief commercial officer Simon Wookey promoted to CEO under chairman Mark Samworth.
The group reported a 13% rise in revenues to £1.6bn in 2023 as it won new business and benefitted from “a strong Christmas trading period”.
Samworth and Spayne Lindsay declined to comment.
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