Spreads business Meridian has hired corporate advisors to explore sale options and capitalise on booming demand for nut butters as health-conscious consumers seek high protein, no-added-sugar foods.
3V Natural Foods, which owns Meridian and premium soft drinks brand Rocks, has engaged specialist consumer advisory firm Spayne Lindsay with a brief to find a private equity buyer for a minority stake in the group.
An information memorandum (IM) is due to go out in the coming weeks to interested parties, which is likely to include the usual mid-cap PE houses such as ECI, LDC and Livingbridge.
Meridian, which accounts for most of 3V’s sales, has grown rapidly in the past few years, with revenues up 30% to £21.6m in the year to 30 September 2016, slowing from a 76% jump in the previous 12 months, according to the latest accounts at Companies House. EBITDA at the brand leapt more than 37% to £1.5m.
Dealmakers expect the group to fetch a “competitive” double-digit multiple for any sale, but lower than those paid for the likes of other healthy snacking brands Grenade, Nakd and Trek owner Natural Balance and Bear in the past two years.
“Meridian have done a lot for the nut butter space - with a big part of the growth in the market down to them - but the category is increasingly challenging because of disruptors such as Pip & Nut, which is releasing products in new and interesting formats, with the on-the-go squeeze sachets really successful,” a City source said.
The spreads category grew 4.4% to £308.4m [Nielsen] in 2016, with most of the additional value coming from nut butter brands such as Whole Earth, Sun-Pat and Meridian as consumers in the UK ate an extra 1.1 million kilos [IRI] of the high-protein product.