Hovis, the 134-year old British brand, has announced that it has been bought by private equity firm Endless LLP for an undisclosed sum.
The terms of the agreement have been approved by both the Gores Group and Premier Foods, Hovis’ current owners.
The bakery brand said it has seen a significant turnaround in the last four years and significant investment by Endless will support the existing Hovis management team to deliver their future plans.
Endless’ acquisition of Hovis is the company’s third investment in recent times in the UK food sector.
Nish Kankiwala, Hovis chief executive officer, said: “We are delighted to announce this
agreement with Endless LLP today. Based on our extensive engagement with Endless LLP over the past several months, it became clear that both parties share a commitment to customers and colleagues and for building on Hovis’ heritage by investing in growing both the brand and product range. This shared vision makes Endless LLP the best shareholder to support our ambitious plans.
“The acquisition will help drive our strategy for growth by bringing both strategic and operational value to Hovis. We are looking forward to working together to execute this strategy and to delivering the next phase of growth.”
Francesco Santinon, partner at Endless LLP, added: “Hovis is the instantly recognisable British bread brand with a strong and established heritage. We were extremely impressed by the management team and have great confidence in supporting and investing in its future as Hovis looks to achieve further expansion within the bakery category.”
Analysis
Mark Lynch, partner at corporate finance house, Oghma Partners, a financial advisor for the food sector, said: “Endless’ modus operandi is to take struggling businesses and drive significant improvement. The incremental performance at assets Karro and Bright Blue have been excellent examples of this – they are therefore logical owners of Hovis for the time being. It is possible that they may look to merge the business with the cake business, Bright Blue, which should deliver synergies across head office, back office, purchasing and possibly sales and customers.
“A bigger business could also possibly make the larger entity a candidate for an IPO. Medium term, Hovis remains up against two well-funded and well invested competitors in Warburtons and Allied so the challenge will be to improve the competitive position whilst holding on to any cost savings that can be generated.”
