Hicks Muse buys Weetabix in £642m deal

The UK-based breakfast cereal manufacturer will be bolted on to Hicks Muse’s existing UK portfolio company, Premier Foods.

(PrivateEquityCentral.net) Dallas-based private equity firm Hicks, Muse, Tate & Furst has agreed to acquire UK breakfast cereal manufacturer Weetabix in a privatisation that values the company at approximately £642m ($1.09bn), with a plan to add the business on to its Premier Foods platform.


Hicks Muse will pay £268.75 per ordinary share for the company and £53.75 for each ordinary A share. The chairman and board of directors of Weetabix have vowed to vote their 51.8 per cent stake in the company in favour of the transaction.


Weetabix is a UK breakfast cereal manufacturer with brands that include Alpen, Weetabix, Weetos and Ready Brek. The company was founded in 1932.


“We are delighted with the opportunity to acquire Weetabix,” Lyndon Lea, a partner in Hicks Muse’s London office, said in the statement. “We are keen to support the continued development of these iconic brands, respecting their heritage and enabling Weetabix and its employees to thrive under our ownership.”


JP Morgan advised Hicks Muse on the transaction. Weetabix was advised by Rothschild.


Earlier this month, Hicks Muse made a further bolt-on acquisition to its Premier Foods portfolio company, acquiring the Ambrosia and Brown & Polson units of Unilever in a deal reportedly worth E105m ($121.7m). The brands generated combined sales of approximately £60m ($101.6m) in 2002. The units join the expanding group of food brands controlled by Premier, which includes established UK brands such as Loyd Grossman, Crosse & Blackwell and Branston Pickle.


Hicks Muse has also recently launched its second European fund, with a target of E1bn ($1.17bn).


In August, Hicks Muse sold branded consumer food company Pinnacle Foods to JP Morgan Partners in a transaction valued at $485m, realising a profit of more than $350m on its investment.


Hicks Muse operates internationally from offices in London, New York and Buenos Aires. With approximately $11bn under management, the firm since 1989 has completed or currently has pending more than 400 transactions with a total capital value of approximately $50bn.