Symington’s sale likely but £100m price tag ‘optimistic’

ICG – private equity owner of the Leeds-based producer of Chicken Tonight and Mug Shot – is understood to have appointed investment bank Houlihan Lokey to seek a potential exit.

While the sales process is still in a very early stage, interest from private equity firms is expected to be solid with a valuation of between £80m–£100m, reported The Grocer. ​

Julian Wild, corporate finance director for Rollits, told Food Manufacture ​that it was highly likely Symington’s was shopping around for buyers, as the pandemic had greatly benefitted the business –as it had many ambient businesses.

Accounts filed early ​

“Although the EBITDA ​[earnings before interest, taxes, depreciation and amortisation] to August last year was nearly £10m, the net profit was only £2.7m, indicating a very high interest and depreciation level,”​ he said. “The accounts were filed by early December, so they did not waste any time in getting them finalised.”​

Wild posited that the rush to get the numbers out was a likely indication that the business wanted something to show potential buyers.

However, Wild said the £100m price tag for the business was very optimistic, given the turnover of £144m on the back of a good year and a net loss in the previous year.

Little trade interest ​

“I doubt there would be a long line of trade buyers, although private equity is always a possibility given that there are a lot of financial buyers with cash to spend,” ​he added. “It’s a business with a mixed trading history and not the most attractive product profile.”​

Symington’s operates in the ambient food sector across multiple grocers and convenience in the UK and internationally, employing 900 people.

It has four sites – three in West Yorkshire and a wet meals & soups facility in Consett, Durham. It was established in 1827 by William Symington initially supplying tea, coffee and groceries before the founder invented instant soup and expanded into other dried foods. 

Meanwhile, Nomad Foods Limited has announced it has entered exclusive negotiations to acquire Fortenova Group’s Frozen Food Business Group​​ (FFBG), which includes Ledo, Frikom and other frozen brands.