Finnish food group Raisio has acquired UK-based Big Bear Group for Eur95.3m (£82.0m) to further its growth strategy of becoming the leading provider of healthy snacks in Europe. In the financial year to the end of August 2010, Big Bear Group’s net sales were Eur65.1 m, EBITDA was Eur13.6m and EBIT was Eur12.1m. Nearly 70% of net sales are generated by breakfast and snack products and 30% by confectionery. The company employs some 250 people and has production in two locations in Leicester and in Southall, London.
Big Bear Group was founded in 2003 and it has acquired traditional, well-known brands in Britain. In breakfast category, the company owns the brands Honey Monster, Honey Waffles and Sugar Puffs, in snack bars Harvest Cheweee and Fox’s in confectionery. The product range includes breakfast cereal products mainly for the children’s category as well as healthy snack bars and cereal products with no artificial flavours or colours.
With the acquisition, Raisio will gain a stronger foothold in the branded snacks and breakfast markets in Great Britain and Western Europe. The deal will also strengthen the company’s position in the UK confectionery market. Great Britain becomes the largest market area for Raisio’s food business with Eur140-150m in annual net sales. Raisio is already present in the British snacks market with Glisten, which it acquired for Eur22.8m in 2010.
“Big Bear complements extremely well the earlier acquisition of Glisten and brings the necessary critical mass for the future,” says Matti Rihko, chief executive of Raisio. He points out that Raisio’s growth is proceeding according to plan and that the company will continue to be an active player in the acquisition market. Big Bear Group will be integrated into Raisio’s Western European brand operations.
Big Bear Group was owned by the company’s senior management together with a group of institutional investors including specialist private bank Investec.
Investec has realised an Internal Rate of Return on its original investment of over 37%. Investec has supported Big Bear since its inception, backing its first acquisition in September 2003 of a non-core division from Northern Foods and the subsequent acquisition of the Sugar Puffs, the Honey Monster and other brands from Pepsico in 2005.
Investec backed a management team led by Paul Wilkinson, John Jackson (joint chairmen) and Mario Giannotta (chief executive) to build the business via acquisition and organic growth. Since the first acquisition, management has increased group EBITDA from £1m to £12m.