M&A within the food and drink sector, reflections on 2018

 
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The food and drink sector had a great 2018 with a significant number of deals being completed.

 

To start the year off strong, Burts Potato Chips Ltd acquired the Leicester based snack company Savoury & Sweet Ltd. “This is an exciting time for everyone working at Burts and Savoury & Sweet. NPD is high on our agenda and we are looking forward to bringing new and exciting innovation that will challenge the current UK snack market.” – David Nairn, Managing Director of Burts Potato Chips Ltd.

 

Granarolo UK Ltd acquired Northampton based Midland Food Services Ltd in February 2018.

 

In March, supermarket retailer Tesco plc acquired Booker Group plc, the UK’s largest food wholesaler for £3.6 billion. This was the first big change within the food retail sector in 2018 and is significant as they previously held the largest market share of the 10 largest supermarkets. The merger could indicative of the changing retail landscape with a shift towards online shopping.

 

Tayto Group Ltd, one of the leading UK snack manufacturers, acquired popcorn manufacturer Sarcon (No. 392) Ltd’s assets in May 2018, and in June acquired The Real Pork Crackling Company Ltd. “This acquisition is an excellent fit for Tayto Group,” said CEO Paul Allen about the deal with The Real Pork Crackling Company.  This is the biggest diversification for Tayto Group Ltd since 2000 which saw the introduction of its healthy eating range, which is a growing sector.

 

July saw several acquisitions including Belgium based biscuit company Lotus Bakeries NV acquiring The Kids Food Co. Ltd in July. Nomad Foods Ltd acquired Aunt Bessie’s Ltd for £212 million.  Aunt Bessie’s has been a family staple for 167 years and whereas Nomad Foods Ltd was established 3 years ago.  It is certainly a shrewd acquisition as frozen foods sales rose 6.1% in 2017 alone. Sweet Ideas also acquired Peterborough based Barnack Confectionary Ltd.

 

FT Foods Limited completed a multi-million-pound acquisition of seven KFC restaurants in August and completed a deal to acquire MFit Foods Ltd.  Fazan Tahir, owner of FT Foods Limited, said “this deal is a significant step in my journey from my start in 1994 to what is today a multi-award-winning, multi-million-pound sales KFC business.”

 

Sweet dessert company Haydens Bakery Ltd was acquired by London based Bakkavor Group plc for £12 million in September. Haydens Bakery Ltd prides itself on 40 years of family ethos backed baking, conversely Bakkavor Group plc has a more specialised focus. This shows a continuation of the trend of big businesses buying smaller personality-based brands.

 

Seabrook Crisps Ltd was acquired in October by Yorkshire based Calbee (UK) Ltd. Seabrook will continue to be led by CEO Jonathan Bye. “It’s an exciting time as we embark on the next phase of our growth journey,” said Bye.  This is Calbee (UK) Ltd first acquisition and hope that this will help broaden their market offerings and generate growth.

 

Tyson Foods Inc. acquired Keystone Foods Holdings Ltd in November 2018 for £1.8 billion. The acquisition highlights a growing trend of British companies uniting with their American opposition. This supports the theory that British companies are more attractive to overseas acquirers.

 

December saw multiple acquisitions. Unique Seafood Ltd acquired Grimsby based Oceanwide Seafood Ltd and Barry Callebaut AG acquired Burton’s Food Ltd’s chocolate factory in Liverpool.

 

2019 looks set to follow in 2018’s footsteps with many companies announcing they are looking to make acquisitions. If you are in the food and drink sector 2019 would be a great time to look into the value of your company.

 

Please do not hesitate to fill out our free valuation calculator, to find out the potential worth of your company on this active market, or simply call 0203 441 2003 to speak to one of our experts.

 

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