A buyout at premium own-label bread maker Village Bakery is nearing a conclusion, with a European trade player set to announce a deal within days, The Grocer has learned.
It comes as the Wrexham-based M&S supplier published accounts at Companies House showing a surge in EBITDA and a return to profitability at an operating level.
A sale process – revealed by The Grocer in March – run by US investment bank Stephens on behalf of owner Limerston Capital is understood to be in its final stages.
City sources tipped French group Norac Foods, which has a UK arm, as a frontrunner in the auction, with the likes of Aryzta Bakery also linked to the process in the early days.
A deal is said to already be over the line with an official announcement expected in the next week.
Limerston bought a controlling stake in Village in early 2021 from the Jones family, who also retained an interest and continued to run the business under MD Robin Jones.
Tracing its history in Wales to the 1930s, the group has been transformed from a regional player to the number one supplier of private label baked goods to supermarkets.
M&S accounts for a large proportion of the group’s revenues, but the company also works with Waitrose, Sainsbury’s, Tesco, Morrisons, Ocado and Co-op, as well as foodservice, and makes products under its own Jones’ Village Bakery brand.
Accounts filed this week for the group’s holding company revealed turnover soared 42% to £98m in the year ended 24 September 2023 as higher prices took hold. Village also benefitted from a full operational year of its sourdough line and other NPD driving innovation for customers.
Margins at the group have been squeezed following delays to agreeing price increases to offset surging costs. But EBITDA still more than doubled from £5.6m to £13.1m – and is understood to now be closer to £20m after several rounds of price hikes.
The group also moved from an operating loss of £4m to profit of £1.4m. However, pre-tax losses grew from £16.5m to £21.8m as result of £23.2m of interest on debt.
The results marked a continued turnaround for Village after a devastating fire destroyed a third of its production capacity in 2019.
Today, it operates a 35-acre campus, including a new 140,000 sq ft ‘super bakery’, a dedicated gluten-free facility and a site for bagels, sesame buns, scones, dough balls and pancakes.
Village featured in M&S’s Tom Kerridge-fronted ‘Farm to Foodhall’ advertising campaign last year, highlighting the supplier’s partnership with Wildfarmed, using the regenerative farming business’ flour to bake the retailer’s premium own-label sourdough bread.
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