Confectionery group Innovative Bites (IBG), which owns speciality wholesaler Hancocks Cash & Carry, has been snapped up by mid-market private equity firm A&M Capital Europe (AMCE) for an undisclosed sum.
It follows the Loughborough-based group hiring advisors at US financial services firm Stephens last year to find a buyer, as revealed by The Grocer in November.
IBG said the deal would strengthen its existing position in the UK confectionery and snacking sector, while continuing to grow the owned and partner brands and pushing expansion with new exclusive partnerships.
With AMCE’s support, IBG also intends to “actively pursue bolt-on acquisitions”, focusing primarily on branded targets in existing and new categories where the group can “leverage its unique distribution footprint”.
The London-based PE firm, which acquired a majority stake in IBG from New York-based asset manager from Sculptor Capital Management, added it planned to drive further growth across the group’s digital routes to market.
IBG will continue under the leadership of existing management team, led by CEO Wayne Beedle. The team invested in the deal alongside AMCE.
“We are all incredibly excited about the next phase of our growth journey,” Beedle said.
“Sculptor has been hugely supportive over the last five years, enabling the business to focus on serving our customers’ needs.
“As the largest distributor, importer and wholesaler of confectionery in the UK, we take pride in being great partners for our suppliers and customers. With AMCE as our new equity partner, we will further invest in our award-winning brands and by supercharging our digital capability, we will serve our customers as they want to be served.”
He added: “The senior management team will continue to run the business, with the desire and commitment to see the ongoing growth and success of all the businesses in the group remaining as strong as ever.”
IBG serves a base of 60,000-plus customers in the convenience retail, wholesale and grocery channels across a range of routes to market, including direct distribution through van and field sales, cash-and-carry sites, an e-commerce platform and distribution operations for national accounts.
It trades as World of Sweets – which includes Hancocks and confectionery brands Kingsway, Bond of London, Candy Realms and Crazy Candy Factory – and Bobby’s, a sweets, cakes and snacks wholesaler supplying c-stores and indies.
The group has exclusive partnerships with major confectionery brands such as Nerds, Warheads, Anthon Berg, Vimto and Pez.
Innovative Bites was founded in Bedfordshire by Vishal Madhu in 2008, growing to become the UK’s number one confectionery distributor, importer and wholesaler following a series of deals.
The group acquired Bonds of London, one of the UK’s oldest confectionery businesses, in 2016 to double sales to about £50m before making the largest acquisition in its history – supported by Sculptor Capital Management – with the £100m takeover of Hancocks in 2017. Madhu exited the business following the deal in 2017, with Sculptor taking a majority stake in the enlarged group.
Revenues at Innovative recovered to £186m in 2021 – a 22% year-on-year rise – following disruption and closures during the pandemic, with adjusted EBITDA up 64% to £12.4m, according to the most recent Companies House accounts available.
A City source told The Grocer in November that EBITDA was now closer to £20m and the group could achieve an 8x multiple in a sale, valuing it at upwards of £160m.
AMCE is a pan-European, London-headquartered, mid-market private equity investment firm, with €650m of assets under management in its current fund, and is part of A&M Capital.
IBG was advised by Stephens as exclusive financial advisor, with Browne Jacobson as legal advisor, CIL as commercial advisor and KPMG as accounting and tax advisor.
AMCE was advised by Weil, Gotshal & Manges and DWF as legal advisors, Houlihan Lokey as financial advisor, MDW Capital Partners as debt advisor, EY Parthenon as commercial advisor, Palladium as digital and IT advisor, Alvarez & Marsal as accounting advisor and EY as tax advisor.