£100M: the ‘high price’ of Tyrrells crisps
Food industry commentator Julian Wild, of legal firm Rollits, told FoodManufacture.co.uk: “Plenty of the Far Eastern potential buyers would see a big opportunity for snacks – but £100M is an aspirational price.”
Founded by Herefordshire potato farmer Will Chase in 2002, Tyrrells was sold to private equity firm Langholm Capital in April 2008 in a deal valued at almost £40M.
Will Chase used the proceeds of the sale to develop his new vodka business, which uses potatoes that are too small for crisp production.
Wild said: “Langholm paid a good price for it so they’ll be looking to get a good multiple for it. But £100M is a big price.”
British success story
City analyst Clive Black told FoodManufacture.co.uk: “Tyrrells is a great brand and a wonderful British success story in the food market at home and abroad.
“We are not surprised to see its owners seek to crystallise gains, noting that they have taken the business on well from its founder.”
Wild said the brand would be a likely candidate for a private equity secondary buyout.
“It appeals to private equity because it’s a fast-growing branded product,” he said. “A lot of its growth has come through exports. It’s done very well in Scandinavia and India. Growth in the UK is harder to achieve and they’re keen to see it grow as an international brand.
“With increasing affluence in the Far East, snacks are going to grow in importance.”
Black said: “A strong brand in a growth market is the stuff of premium ratings. Hence, we’d expect a lot of suitors – trade and financial, home and abroad to be dusting off files on Tyrrell.”
Potential interested parties
Potential interested parties are rumoured to be Kellogg, Blackpool-based sherbet fountain maker Tangerine and Calbee, US multinational Hain Celestial, and an unnamed Japanese snack company.
Since acquiring the UK’s Daniels Group in October 2011, Hain Celestial has been expanding its presence in Europe with the purchase of Premier Foods’ spreads business in August 2012, the Adelie Foods Group’s prepared fruit products business in November 2012 and Irish chilled soup specialist Cully & Sully in May 2012.
Wild thought it “extremely unlikely” that Hain Celestial would buy Tyrrells.
He said: “Hain would surprise me because they’ve got plenty on their plate. They’ve done a lot of deals recently, so I would be very surprised if they wanted to pay the sort of money required to do this deal.
“Others would be willing to pay more.”
