Newlat, the Italy-based food group that had been looking to make an acquisition in the UK, has announced a deal to buy local manufacturer Symington’s.
Under the terms of an agreement unveiled today (4 August), bakery, pasta and dairy manufacturer Newlat will pay GBP53m (US$73.7m) for Symington’s, a supplier of branded and own-label food.
Last autumn, Newlat had gone public with its interest in Hovis and wanted to hold exclusive talks over a possible deal to buy the UK bakery group.
Hovis was ultimately sold to private-equity firm Endless but Newlat was open about its interest in making acquisitions. The company told Just Food in March it was eyeing five possible targets in “complementary sectors” across Italy, Germany, France and the UK.
In February, Symington’s, which had UK investment fund Intermediate Capital Group as its majority investor, said it had hired advisors “to scope the market for opportunities” to allow the company “to invest and grow”. The statement came after a media report suggested Symington’s could be put up for sale.
Angelo Mastrolia, Newlat’s chairman, said: “This is an interesting business with high potential for growth and we deem it to be a perfect fit into our strategic plan. We see a number of synergies between our businesses as we both produce complementary but different categories of products.
“Not only will there be significant cost synergies but, also, this acquisition allows us to enlarge and diversify our product range and our geographical reach. This opportunity enables us to set foot into the UK and thus consolidate our position in this extremely relevant market. We are ready to invest in the business and to support its international expansion.”
The Symington’s product range includes pasta, soups, noodles and cooking sauces. The company’s brands include Mug Shot, Naked, Ilumi, Chicken Tonight and Ragu. Own label accounts for 48% of Symington’s business, according to the company’s latest results filing with Companies House. Some 47% of the group’s sales come through its brands, with the remainder from business-to-business and the firm’s new direct-to-consumer service.
In the year to 30 August, Symington’s generated turnover of GBP114.2m, up 4.2% on the previous 12 months. The company posted an operating profit of GBP2.8m, versus an operating loss of GBP2.9m a year earlier. After-tax profit was GBP2.9m, compared to a loss of GBP3.1m the previous year. Outside the UK, the company’s sales were GBP8.6m, versus GBP4.9m a year earlier, helped by listings with Walmart.
David Cox, a former director at the UK firm Fox’s Biscuits, became Symington’s CEO last autumn, succeeding former Associated British Foods director John Power, who spent three years at the helm.
Cox described the sale to Newlat as “fantastic news for us”. He added: “Newlat wants to invest in our business and our brands. It provides long-term security for our business with an international ambient and dairy food player operating in mutually beneficial categories and is an exciting time for us both.
“By bringing together both businesses we can combine our strengths, accelerate our growth and increase our global footprint. Symington’s provides a strong springboard for Newlat’s brands into the UK market and Newlat gives us further opportunities for us to grow our brands internationally where Newlat has operations – in Italy and Germany.”
Newlat has 1,500 employees across 14 production plants in Italy and one in Germany. Symington’s has manufacturing and distribution centres spread over two locations in Leeds, one in Bradford and another in Durham.