The bread brand Hovis has been sold to Endless for an undisclosed sum.
Following talks, Endless acquired the brand after Newlat Food issued a statement saying that they had withdrawn themselves from the bidding war.
Owned by Premier Foods (LON: PFD) and US investment firm, Gores Group, Hovis is a 134-year old firm that employs 2,800 people across the UK. Sales at the brand surged over lockdown as consumers stockpiled.
The value of the deal has not been disclosed, however, Premier Foods has said they will receive £37m.
Equity firm Endless has said they plan to significantly invest in the Hovis brand to achieve growth plans.
Nish Kankiwala, chief executive of Hovis, said: “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’s heritage by investing in growing both the brand and product range.
“This shared vision makes Endless the best shareholder to support our ambitious plans.”
Mark Lynch, Partner at corporate finance house, Oghma Partners, commented on the deal: “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.”
Premier Foods shares (LON: PFD) were up 1.75% on Friday morning (0916GMT).