British bread brand Hovis has been bought by UK private equity firm Endless for an undisclosed sum.
The 134-year old business was jointly owned by London-listed Premier Foods (PFD.L), which held a 49% stake, and Gores Group.
Premier Foods, which owns the Mr Kipling, Angel Delight and Ambrosia brands, confirmed that it will receive £37m ($49m) in proceeds from the deal.
Nish Kankiwala, chief executive of Hovis, said: "Based on our extensive engagement with Endless over the past several months, it became clear that both parties share a commitment to customers and colleagues and for building on Hovis's heritage by investing in growing both the brand and product range.
"This shared vision makes Endless the best shareholder to support our ambitious plans. The acquisition will help drive our strategy for growth by bringing both strategic and operational value to Hovis.”
Endless, which has previously owned The West Cornwall Pasty Company, said it will inject “"significant investment" into Hovis to help management achieve their future plans.
The company was put up for sale in the summer by its controlling shareholder.
In September, it was reported that a number of private equity funds and food companies were eyeing up a Hovis acquisition, including suitors such as Bella Italia owner Epris, and Aurelius Equity Opportunities.
Last month Italian food giant Newat Foods was said to be looking to purchase the bread maker, in a move that would have seen it exchange hands for more than £100m.
Hovis, founded in 1886 in Macclesfield, employs more than 2,700 people across its business. It sold two of its flour mills in 2018 to focus on its bakery operations.
Mark Lynch, partner at corporate finance house, Oghma Partners, said Endless was Hovis’ “logical owner.”
“It is possible that they may look to merge the business with the cake business, Bright Blue which should deliver synergies across head office, back office, purchasing and possibly sales and customers. A bigger business could also possibly make the larger entity a candidate for an IPO.” he said.
“Medium term Hovis remains up against two well-funded and well invested competitors in Warburtons and Allied so the challenge will be to improve the competitive position whilst holding on to any cost savings that can be generated.”
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