Premium tortilla chips maker It’s All Good (IAG) has hired advisors to sell the business after seeing the pandemic bolster demand for snacks.

The supplier, which makes private-label tortilla chips and rice cakes for Aldi, Lidl and M&S, as well as its own Manomasa brand, has been backed by PE firm NVM since 2014 following a £3.5m minority investment.

The sale process, run by investment bank Houlihan Lokey, has garnered interest from international snacking giants, according to dealmakers.

It is understood KP and Tyrrells owner Intersnack and Japanese snacks group Calbee, which owns Seabrook, are not involved in talks, leaving the door open for Irish group Valeo, which also owns Kettle, and private label specialist Europe Snacks Kolak.

A trade sale is the likely outcome, but City sources didn’t rule out a late play from PE houses.

A deal could complete before Christmas, sources suggested, but may run on into the new year.

Calum Ryder, Michael Weatherhead and Lynn Saul set up IAG in 2012, having previously worked at Intersnack. Ryder formerly led pretzel manufacturer Union Snack, which was backed by NVM in 1996 and sold to Intersnack in 2007.

Revenues at IAG jumped 22% to £33.4m in 2019 as product innovation and its relationships with retailers underpinned another year of growth, the latest Companies House accounts showed. It has grown sales from below £12m when NVM invested six years ago.

EBITDA is estimated to currently be £3m to £4m, with the new buyer expected to pay northwards of £25m.

“IAG is a fantastic business, which is run brilliantly and well invested, making the best product in the marke,” a City source said. “However, the majority of the business is own label, which could hold back the multiple a little compared to a purely branded supplier.

“It has potential to scale up under a new owner and it is also in a good space within snacking as the product has healthier credentials compared to other tortilla brands such as Doritos.”

IAG worked with corporate advisors at Houlihan Lokey in 2018 to explore options including a possible sale.

In the end, the company secured an eight-figure refinancing package, structured by Allied Irish Bank (GB), to support the supplier’s growth strategy and expand capacity.

Nielsen figures show Manomasa’s retail sales grew 19.7% to £5.2m in the 52 weeks to 5 September 2020.

Consumers have reached for snacks much more this year while stuck at home during the coronavirus crisis, with sales surging 20% in the category in the first month of the initial nationwide lockdown [Kantar]. Bagged snacks added a further £113.1m of value to be worth £3.3bn in total, with an extra 16.1 million kilos going through the tills [Nielsen 52 w/e 5 September 2020].

IAG, NVM and Houlihan Lokey did not respond to request for comment.