Honey Monster yields sweet return for Investec

Investec has made a 37% return on the owner of Sugar Puffs, the cereal made famous by its 1970s TV ads starring the Honey Monster.

Investec growth and acquisition finance, a division of the specialist banking group, has exited its investment in Big Bear, the group behind such brands as Sugar Puffs and Fox’s Glacier Mints. The £83 million (€98 million; $134 million) sale to Glisten – a UK arm of a listed Finnish conglomerate – will net the bank an IRR of 37 percent, it said in a statement.

The bank backed the original carve-out of Big Bear from Northern Foods in 2003 and its subsequent acquisition of the Sugar Puffs, the Honey Monster and other brands from Pepsico in 2005.

Honey Monster: the face of Sugar Puffs

Investec originally provided a finance package of senior and mezzanine debt and equity. Following a refinancing in 2006, Investec has been only an equity sponsor with a “significant minority stake”, said Investec’s James Stirling. The management team behind the buy-and-build retained most of the equity in the business.

Big Bear had originally been slated for a public listing at the beginning of 2010, but market conditions were not conducive. Subsequently an unsolicited bid came in from Glisten in the second half of the year.

Investec’s growth and acquisition team invests the bank’s own balance sheet capital, backing both private equity firms and individual management teams and providing finance packages of between £5 million and £30 million to mid-market deals.