The deal, which will be paid in two equal instalments – 50% on completion and 50% upon finalisation of the company’s 2017/18 audited accounts – will be financed from RGF’s existing debt facilities. It is expected to immediately enhance RGF’s earnings.
Brighter Foods makes snack bars for the healthy snacking market from its factories in Tywyn, Gwynedd in Mid Wales, where it is an important local employer with around 170 full-time staff.
The company’s snacks are targeted at markets such as diet control, gluten-free, lactose-free, low or no added sugar, sports nutrition, organic and fair trade. Brighter Foods makes both ‘partner branded’ products and has its own healthier brands such as Wild Trail, which is stocked by the multiples as well health food stores.
Brighter Foods began trading in April 2014 and has grown since then under the leadership of founder and ceo Robin Williams. Following completion of the deal, the senior management of Brighter Foods will retain a 15.67% stake in the business.
“Brighter Foods fits well into our strategy to consolidate profitable well-run businesses in niche areas of the food manufacturing industry,” said RGF executive chairman Pieter Totté.
“Robin and his team have achieved fantastic growth and stability in the business and we are looking forward to continuing the success story. Real Good Food investment will enable Brighter Foods to expand and improve its capacity and product range even further. We are excited about the future prospects.”
‘Invest in the business’
Commenting on the deal, Williams said: "I have known Pieter for years and have worked with members of his team previously and I'm very pleased to be doing so again. They share our vision to invest in the business and to grow it further from the strong base we have established.
“I'll be staying as ceo and together we have already agreed a headline plan to continue growing our manufacturing facilities in Tywyn. This is great news for the town and its people. Real Good Food recognises the importance of good people in business and the importance of the factory to the local community and I am really delighted that this partnership will build on our success to date."
For the 12 months to March 31 2016, Brighter Foods reported profit before tax of £2.3M and net assets of £2.7M.
Last December, RGF reported that its sales had grown by 5% to £49M in the six months to September 30 2016, driven by the performance of its premium bakery division. It also posted an increase in gross profit to £13M from £12.5M.
In February 2016, RGF also acquired Devonshire frozen desserts manufacturer Chantilly Patisserie for £1.75M as part of its strategy to enter new markets through acquisitions.