Endless today announces that it has acquired Hovis (‘Hovis’ or ‘the Company’) the UK’s iconic 134-year-old bakery brand for an undisclosed price.
Endless has invested from Endless Fund IV and this is the firm’s third investment in the food sector in recent times. Endless previously owned and successfully realised Karro Food Group – the leading pork business – and currently owns BBF, a leading supplier of ambient cake products to the UK’s major grocers.
Hovis is a favoured consumer bread brand and is supported by its key customers and suppliers. It has seen strong growth in its branded market share and the business is well placed to capture further share of the UK’s £4 billion overall bakery category. With headquarters in High Wycombe, the business employs circa.2,700 people and operates eight bakery sites, its own flour mill and a distribution network spanning the UK and Northern Ireland.
Under the current management team, Hovis has seen a significant up-turn in trading in the last four years and will continue to drive its strategy focused on delivering great quality products, customer value and service. Further investment agreed as part of the deal with Endless will allow the Hovis management team to make significant investment into the business infrastructure, growth of its branded range and other bakery products.
Nish Kankiwala, Hovis Chief Executive Officer said: “We are delighted to announce this agreement with Endless today. Based on our extensive engagement with Endless 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 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, 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.”
Commenting on how Hovis has been bought by Endless after a significant turnaround over the past four years, Mark Lynch, Partner at corporate finance house, Oghma Partners, 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.”
Endless was advised by Houlihan Lokey (CF), Dechert (Legal), KPMG (Tax) and the Company was advised by Robert W. Baird.