bounce energy balls

Protein energy ball brand Bounce Foods is seeking external investment to help continue its international rollout.

The UK-based business, launched by husband & wife team Andy and Paula Hannagan in Australia in 2004, has engaged corporate finance adviser Spayne Lindsay to find a buyer.

An information memorandum has gone out to interested parties, with first-round bids expected before the year end.

Bounce has grown rapidly since its UK launch, with current annual revenues of c£16m, The Grocer understands. About half the sales come from the UK, with most of the rest from Australia, and some from North America. “The global nature of business and the rapid growth mean there is lots of interest in Bounce,” said a source.

However, heavy investment in marketing the brand, particularly in the US, is understood to have pushed Bounce into the red. Sources said it was breaking even outside the US, but some suggested the losses could dampen private equity interest.

“Losses are mostly down to marketing but it also has slender margins as production of the energy balls is by a third party so is costly,” one source said.

“It will find a buyer because it is a good brand and right on trend, but the market is not the same as it was two years ago when Nakd scored a seriously impressive valuation. EBITDA multiple of more than 20x. Competition has become much more fierce thanks to the launch of a Deliciously Ella rival product and also the Protein Ball Co”

Bounce hired Spayne Lindsay with a brief to find an investor for a minority stake to provide an exit for its angel backers, rather than a full takeover, sources

“The process was angled toward a private equity buyer but that is looking difficult and trade players will likely want to take the whole thing so the owners may have to sell a majority to get a deal done,” a City source added.

However, said. was unique for its size thanks to its international presence and teams on the ground in Australia and North America. “There will be many different kinds of investors looking at this so not just your traditional UK PE firms.”