Raisio Agrees to Acquire British Big Bear Group plc
With the acquisition, Raisio will gain a stronger foothold in the branded snack and breakfast markets in Great Britain and Western Europe and the acquisition will also strengthen the company’s position in the UK confectionery market.
2/7/2011 --- Raisio has signed an agreement to acquire British Big Bear Group plc for enterprise value of EUR 95.3 million (GBP 82.0 million). The acquisition supports Raisio’s growth strategy to become the leading provider of healthy snacks in Europe.
With the acquisition, Raisio will gain a stronger foothold in the branded snack and breakfast markets in Great Britain and Western Europe and the acquisition 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 EUR 140-150 million annual net sales. Raisio is already present in the British snack market with Glisten acquired in 2010.
Raisio’s CEO Matti Rihko is pleased with the acquisition. “With the acquisition of Big Bear Group, Raisio will strengthen its footprint in the markets in Great Britain and Western Europe, and the company’s brand business is growing as planned. Big Bear sales is all branded, and it has a very strong market position in interesting and suitable sized categories. Big Bear complements extremely well the earlier acquisition of Glisten and brings the necessary critical mass for the future." Rihko states that Raisio’s growth is proceeding according to plan and that the company will continue to be an active player in the acquisition market.
In the financial year ended at the end of August 2010, Big Bear Group’s net sales were EUR 65.1 million (GBP 56.0 million), EBITDA 13.6 million (GBP 11.7 million) and EBIT EUR 12.1 million (GBP 10.4 million). Nearly 70% of net sales is 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 children’s category as well as healthy snack bars and cereal products with no artificial flavours or colours.
Big Bear Group is owned by the company’s senior management together with a group of institutional investors that sell the entire issued share capital of the company. Raisio finances the all cash transaction with its cash reserves and a loan of EUR 52 million (GBP 45 million) raised for the acquisition. After the acquisition, Raisio’s financial assets are EUR 100 million and equity ratio is around 60%.
Big Bear Group will be integrated into Raisio’s Western European brand operations as of 4 February 2011. The company’s result will be reported as part of Raisio's Brands Division from the first quarter of 2011. In conjunction with the acquisition Raisio will incur some EUR 3.5 million one-off cost for the first quarter of 2011. The acquisition will improve Raisio’s earnings per share this year, also after the expenses and taxes related to the transaction.
