Premier Foods toasts Hovis sale

The business will now become a stand-alone joint venture between Gores and Premier, with Premier holding onto a 49% stake. Gores paid £30m for its 51% controlling stake.

Both Premier and Gores invested £45m in the newly launched joint venture, and the division will see a total £200m invested over the next five years. The capital will be used to improve operational infrastructure and boost the Hovis brand.

The deal further highlights the increasing trend for US private equity firms to pick up European assets (read our recent analysis here).

Previous funding
In 2009, Warburg Pincus committed £64m to Premier Foods in exchange for a 10.3% stake in the business. The deal was part of a £404m funding round for the listed firm. Later that year, Warburg Pincus increased its stake in Premier Foods to 17.7%.

Company
Premier Foods' bread division trades as Hovis. The business reported sales of £654.6m, trading profit of £6.3m and EBITDA of £21.9m in 2013.

The bread division includes the production, distribution sales and marketing of the Hovis, Mothers Pride, Ormo, Granary and Nimble brands, as well as the private label business, business-to-business sales and the flour milling businesses. The deal included the company's entire operational bakery and milling estate, with the exception of the Charnwood Foods facility in Leicester and a flour mill in Andover.

People
Fernando Goni is managing director of Gores. Gavin Darby is CEO of Premier Foods.

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• Topics
• Exits
• UK / Ireland
• Consumer
• Warburg Pincus
• United Kingdom
• Partial sale