Big Bear: “We have no plans to re-open IPO process”

His comments followed press reports suggesting the firm, which abandoned plans to launch on the Alternative Investment Market (AIM) in March, could still attract investors should it change its mind.

Wilkinson (pictured above), who announced his intention to float Big Bear on AIM in January, told FoodManufacture.co.uk that the “markets were too volatile” ​to make an IPO viable in the current climate, and that he would be “underselling the business”​ were he to re-start the process at this stage.

“I can assure you that we have no plans to re-start the IPO process. The markets are not where we would like them to be. So it’s back to business as usual as far as I am concerned. We would never rule out an IPO but it’s not on our horizon.”​

The business had sufficient cash reserves to meet its needs for the time being, said Wilkinson. “Big Bear Group is highly cash generative and we use the cash to pay down our debt, which strengthens our balance sheet.”​

But it was still eyeing up acquisition opportunities, he said. “We’re looking at unloved brands with their own manufacturing facilities.”​

However, “any acquisitions would require both equity and debt”​, he said. “Our current investors have indicated a willingness to fund more equity and we can invite new ones in whilst still remaining private. Our track record means that debt is available but we would not want to be over-leveraged.”​

As for the mergers and acquisitions market, things had been a “bit hit and miss”​ lately, he said. “There are no real themes emerging.” ​

From strength to strength​

Big Bear was created in 2003 by Mario Giannotta, John Jackson, and Paul Wilkinson through the acquisition of Fox’s Confectionery from Northern Foods. It went on to acquire Sugar Puffs and Harvest Chewee cereal bars from PepsiCo in 2006.

These brands have since been developed and expanded, with several new product launches and “a substantial improvement in performance and profitability”,​ according to the directors, who own about a third of the business.

Big Bear’s sales have grown almost fourfold over the last five years from less than £14m in 2004 to £53m in 2009, while operating profits grew from £1.1m to £8.1m over the same period.

The group has also generated more than £20m of cash from operating activities over the past three years, which has been largely used to pay down acquisition debt and return cash to investors.