Value of food mergers and acquisitions soars

UK food mergers and acquisitions nearly tripled in value in the first half of 2007, according to a study by PKF Accountants & business advisers.

The firm said the overall value of deals jumped from £634M in quarter one to £1.7bn in quarter two. The study, Deal Drivers UK, produced in association with Mergermarket, also found that quarterly deal value now stands at its second-highest level since 2004 with 16 deals in quarter one and 14 in quarter two.

The mid market made up the majority of all the deals done, accounting for between 25-40%. Deals less than £15m accounted for 23-26%, while larger transactions and unaccounted deals made up the rest.

The largest food sector deal in 2007 to date was the £1.4bn secondary buyout of the Brakes Group by Bannerbrick, the acquisition vehicle of the US fund Bain Capital.

In the mid market, May saw one of the top UK food sector deals when Associated British Foods bought Patak’s Foods from its founding family for £125M.

Mark Plampin, corporate finance partner at PKF, said, “M&A activity in the UK Food sector has not abated in the first half of the year with deal volumes comparatively high for the period. It is likely there will be ongoing consolidation in the mid market sector with raw material price rises and continued price pressure from the major retailers likely to keep businesses striving for supply chain strength.”

Copies of the 30 page Deal Drivers UK report can be downloaded from http://www.pkf.co.uk/publications