Bright Food, Lion Capital in talks over Weetabix sale – report
China’s Bright Food Group is being lined up as a potential buyer for Weetabix, the UK-based cereal company currently owned by Lion Capital. The private equity firm has reportedly been in talks with Bright Food for several weeks over a deal that would value Weetabix at GBP1 billion ($1.6 billion).
According to the Financial Times, negotiations began shortly after Lion Capital refinanced GBP900 million in outstanding debt carried by the food company. Lion is said to have already generated a 3x return on its initial investment eight years ago through several dividend payments.
Weetabix - which owns the Weetabix, Ready Brek and Alpen brands - accounts for 7% of the total cereal sales in the UK. It exports to more than 80 countries around the world and generated a gross profit of GBP20.4 million in 2010 off revenues of GBP449 million.
Bright Food, one China's biggest food companies, last year finally realized its long-held ambition to gain a foothold in overseas markets with the acquisition of a 75% stake in Australia's Manassen Foods from CHAMP Private Equity. The transaction valued the company at more than $525 million.
Bright Food had previously tried and failed to invest in assets including yogurt brand Yoplait, CSR's sugar and bio-ethanol business Sucrogen, UK consumer brand United Biscuits and US nutritional supplement retailer GNC Holdings.
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