Speculation surrounding the maker of Kettle Chips has
increased amid claims that the business is looking to spin off its US
business ahead of a sale by its private equity owner.
Lion Capital, which owns Norwich-based Kettle Foods, is believed to be
talking to potential buyers, with snackfood producer United Biscuits said to
among the interested parties.
It is believed that Lion - which is being advised by NM Rothschild - is
speaking exclusively to trade buyers on the basis that rival private equity
groups would be put off by Lion's asking price, which could be as high as
£440m.
A City source told trade magazine The Grocer: “Kettle Foods is definitely
looking for a trade buyer. That's partly because they want strategic tie-ups
on distribution and routes to markets, but it's also because only a trade
player with deep pockets could look to pay anything close to the asking
price in this economic climate.”
The source added that Lion was looking to sell its US operations in a bid to
secure the maximum selling price.
Kettle managing director Jeremy Bradley said: “Both the UK and the US
businesses are doing well. There is always interest in businesses doing well
and we have a great brand that a number of people would love to own.
“Lion Capital is frequently approached about selling Kettle Foods and so
rumours of a sale are not uncommon; this recent one has been around for a
few weeks.
“If Lion Capital has decided it's time to test the water for potential
buyers that wouldn't be a surprise because both businesses are doing well.
“However, that's a very different thing to being sold, particularly in this
economic climate.”
Kettle was bought by Lion for about £170m in 2006. Its latest set of
accounts showed that it had a good 2008, with pre-tax profits up by about
£2.5m to £10.9m and turnover up £10m to £59m.
The accounts for the year to September 2008 also showed that the workforce
at Kettle's Bowthorpe headquarters rose from 350 in to 371, with a rise in
the number of production staff.
Source: Eastern Daily Press
