Plant-based food producer Gosh is eyeing a potential sale after hiring advisors, as investor interest in vegan products continues to surge.
The Grocer understands the supplier has hired corporate finance firm Houlihan Lokey to “consider strategic options”, including the possibility of a sale, minority investor or refinancing.
Gosh produces vegan chilled produce including burgers, sausages and bakes, and is listed in Morrisons, Tesco and Sainsbury’s.
City sources say the Milton Keynes-based supplier “could fetch more than £50m” in a sale situation, amid a clamour of interest from PE and trade investors.
The supplier has seen a period of rapid growth, surging from £5m of sales in 2015/16 to forecasts of £18m of sales for the current financial year.
The potential sale is the latest opportunity for investment in meat-free suppliers, after ‘bleeding burger’ creator Beyond Meat filed for an IPO earlier this week.
The California plant-based protein business, which launched the Beyond Burger into UK Tesco stores last week, is looking to raise an initial $100m through listing its shares on the Nasdaq index.
“Companies like Gosh will garner a lot of interest. Obviously it has strong growth in sales and EBITDA at the moment anyway, but it is also in a really attractive category for investors,” said one City dealmaker.
“I think we could see a high-teen EBITDA multiple. There is bound to be industry interest too, but I wouldn’t be surprised if PE pushes the price high.”
Another City source said: “A key thing as well is that it has very high margins. A sale might not be for 12 months, so its turnover and profit could be significantly larger then too, but until it confirms there’s definitely a sale, this is academic.”
The company has recently expanded, introducing a third production oven to its factory site as demand continues to grow.
In its most recently published accounts, Gosh’s sales rocketed 84% to £10m in the year ended 31 May 2017, while pre-tax profits more than doubled to £1.9m.
Gosh also markets itself as a “naturally free-from” brand, as its vegan products are free of a number of key allergens, including gluten, egg, dairy, nut and soya.
The company had been known as Great Food Limited until August 2018, with some products still branded Great Food until an overhaul this summer.
Houlihan Lokey declined to comment. Gosh did not respond to requests for comment.