Left to right: Lotus CFO Isabelle Maes, Bear founders Hayley Gait-Golding, Andrew Gait-Golding, (back row) Lotus CEO Jan Boone and Urban Fresh partner Giles Brook

Urban Fresh Foods, the owner of fast-growth kids snacking brand Bear, has been acquired by Lotus Bakeries in a deal worth more than £70m, The Grocer can reveal.

Following the £60m takeover of Nakd and Trek bar business Natural Balance Foods in August, the UK will become the biggest country in terms of branded turnover for the Belgian biscuits, cakes and snacks plc – best known for its Biscoff biscuits – ahead of Belgium, the Netherlands and France.

But for Lotus CEO Jan Boone the vision is to roll these brands out from its offices in Europe, the US, Latin America and Asia.

“With this acquisition, we will lead the way and become the true ‘category captain’ of the healthy snacking category in the UK and abroad,” he said. “Lotus wants to offer both more indulgent specialities and healthy snacking alternatives.

“We recognise there is a growing global demand for healthy snacking alternatives, hence we invested in Natural Balance Foods in the summer and now are delighted to add the brands of Urban Fresh.”

Despite selling 100% of the equity, Hayley and Andrew Gait-Golding, who founded Bear parent Urban Fresh Foods in 2007, and former Innocent Drinks commercial director Giles Brook, who invested in 2009, will continue to run the business from its London HQ (Natural Balance will also be run independently).

The trio had been seeking an investor – with the help of corporate finance advisor Houlihan Lokey (formerly McQueen) – since the summer to help the business expand overseas, as The Grocer revealed in July. A fur-covered, pop-up-style information memorandum (IM) was sent out to prospective buyers in November

Brook said Lotus was the “perfect partner” to take the Bear and Urban Fruit brands on to a new chapter of internationalisation. “Lotus will help us maintain our growth story in the UK, where Bear has become the number one kids’ fruit snacking brand,” he added. “In terms of overseas markets, Lotus will be an invaluable partner when it comes to the internationalisation of our two brands.”

Bear, which makes YoYos, Paws, Claws and cereal for kids, and adult-focused brand Urban Fruit, have grown rapidly over the past six years, with annual growth in excess of 50% as the business tapped growing demand for natural, healthy foods – particularly for children.

A new three-year plan aims to treble the size of the business and deliver one billion portions of fruit and veg to consumers by 2018.

Net sales for the Urban Fresh group, which employs 40 staff, is expected to exceed £27m in 2016, up from £16.4m in the year to 31 October 2014, with pre-tax profits forecast at £4.9m.

Lotus paid a multiple of 14x the expected 2016 profits figure, valuing Urban Fresh at about £71m, figthing off a number of other big trade players, such as Hain Celestial, Kellogg’s and AG Barr, to secure the deal. The bakery employs 1,281 staff and has sales of close to €350m.

Senior dealmaker sources raised eyebrows at the punchy valuation, drawing comparisons with the high price paid for Natural Balance (£60m for a 67% stake) by Lotus and Ella’s Kitchen (£66m) by Hain Celestial in 2013.

“A multiple this high on the next two years’ profits is a big risk in a crowded branded space – even for a good business such as Bear,” one City source said. “The question is, how do you keep the momentum going?”

Shaun Browne of Houlihan Lokey, who advised the Urban Fresh team, said: “It is one of the most competitive auction processes we have handled and it attracted a field of extremely high-quality bidders.”

Jan Boone added: “Every strong brand has its own personality, its specific DNA and consumers. In that regard, Lotus will respect and maintain the identity and characteristics of both Bear and Urban Fruit brands, as we have done recently for Nakd and Trek and before for Peijnenburg, Dinosaurus, Annas Pepparkakor and Snelle Jelle brands, whilst leveraging our unique capabilities to drive growth.”

Lotus Bakeries was advised by PwC (accounting), DLA Piper (legal) and Bain & Company (commercial). Urban Fresh was advised by Houlihan Lokey (financial), PwC (accounting) and Joelson Wilson (legal).