OTPP sells Burton's Biscuits to Ferrero

Harriet Matthews
02 June 2021

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Ontario Teachersт Pension Plan (OTPP) has sold its stake in Burtonтs Biscuits to food conglomerate Ferrero.

The deal is valued at around £300m, according to several press reports.

Ferrero is to acquire Burton's via CTH, a Belgian holding company. Ferrero acquired Fox's Biscuits in October 2020 and said in a statement that the acquisition of Burton's will expand its presence in the sweet biscuits market. According to press reports, Burton's was involved in talks to acquire Fox's that began in 2016.

During OTPP's investment period, which began in 2013, the company sold its license to manufacture Cadbury's Biscuits. It acquired Paterson Arran and Thomas Fudge in 2019.

Trade publication The Grocer reported in February 2020 that the company was up for sale, subsequently reporting that Bain Capital was one of the bidders in the final round.

Many consumer-focused food and food retail companies saw revenue growth in 2020 due to an increase in customers cooking and eating at home as a result of coronavirus lockdown restrictions. In fact, 2020 was a record year for aggregate buyout deal value in the sector, with 53 deals totalling almost €13.6bn, according to Unquote Data. In 2021 to date, 25 buyouts totalling €5.8bn have been recorded.

These sectors have seen 19 exits so far in 2021, compared with 34 deals in 2020, according to Unquote Data, with OTPP's exit from Burton's bringing the 2021 total to 20. Between 2010 and 2020, the sector has seen an average of 43 exits per year.

Recent PE exits in the food and food retail sectors include Astorg's €1.7bn sale of ingredient and seasoning blend producer Solina Group to Ardian in May 2021. Also that month, VC-backed Oatly listed in New York with a $10bn market capitalisation, and CapVest sold Ireland-based Valeo Foods to Bain Capital in a deal that valued the company at more than €1.7bn.

UK consumer food brands under PE ownership notably include chilled desserts producer Gü, which was acquired by Exponent from Noble Foods in May 2021. The deal valued the company at around £150m.

Previous funding
Lion Capital acquired Burton's Biscuits for around £434m in 2000. In 2007, Duke Street acquired the business in a deal valued at around £210m, according to Unquote Data.

In 2009, the company underwent a debt-for-equity swap following a debt restructuring through which Duke Street retained a minority stake, while the Canadian Imperial Bank of Commerce and Apollo Global Management took control of a majority stake in the business.

OTPP acquired the business in 2013 for around £350m. The company posted EBITDA of £40m at the time.

Company
Founded in 1935, Burton's Biscuits manufactures biscuits including Jammie Dodgers, Maryland and Wagon Wheels. The company employs around 2,000 staff and has six UK production sites in Blackpool, Dorset, Edinburgh, Livingston, Llantarnam and Isle of Arran, with its headquarters in St Albans. It posted 2020 revenues of £275m, compared with revenues of £340m when OTPP first invested, according to Unquote Data.

People
Ontario Teachers' Pension Plan – Nick Jansa (senior managing director, EMEA).
Burton's Biscuits – Nick Field (CEO); Simon Browne (managing director).

Advisers
Vendor – Stamford Partners (M&A); Kirkland & Ellis (legal).
Acquirer – Davis Polk & Wardwell (legal); LMS Legal (legal); Houlihan Lokey (corporate finance).