Lion shows hunger for Kettle Foods
It’s usually silicon chips that get buyers out of bed to pay £170m for an acquisitional target – but Norfolk potato chip company Kettle Foods has proved a tasty buy at around that price for London based Lion Capital, which already owns Weetabix and other major brands.Shareholders of both companies have agreed the deal.
Lion is acquiring Kettle, which has a major facility in Norwich, in a private transaction conditional on regulatory approval. Established in 1978, Kettle Foods is one of the leading premium salty snack companies in the US and the UK.
The company’s main products include Kettle(R) batch cooked potato chips, and in the US it also produces and sells Kettle brand Bakes baked potato chips, nuts, nut butters and tortilla products.
Kettle Foods is headquartered in Salem, Oregon, and has manufacturing facilities in Oregon and Norwich.
In the current financial year, the company is estimated to generate sales of approximately $150 million (£81.6m).
Kettle is a market leader in both the US natural and premium snack segments, where its products are distributed primarily through natural and mainstream supermarkets, and in the UK premium snack segment, where it distributes its products through mainstream grocery and impulse retailers.
The company is an innovator of all natural snacks which are free of artificial flavours, artificial colours, MSG and trans fats.
Founder Cameron Healy said: “We’ve found an investment partner in Lion Capital that brings deep respect for our brand, confidence in our business plan and the expertise to help deliver on our brand promise to consumers around the globe.
“Under new ownership, Kettle Foods will continue on the same path, making all-natural snacks with the same care and craft that we’ve used for nearly 30 years in business.
“Our fans will see no changes in the products they love; they’ll just be able to find us more easily as we continue to broaden our distribution.”
The founders will remain with the company for a period of time to ensure a smooth transition to the new owners.
Lyndon Lea, founding partner of Lion Capital, said: “Kettle Foods has built a beloved consumer brand with significant loyalty and opportunity for growth.
“As a leader in the premium and natural segments of the snacks market, Kettle is capitalising on consumers’ trend towards ‘healthier’ eating through product innovation and increased market penetration.
“We believe there is a compelling opportunity to continue Kettle’s strong growth behind these same drivers, while honouring the company’s heritage, craft and commitment to great tasting, all natural snacks.”
Kettle opened its plant in Norwich in 1989.
Lion Capital is a private equity investment firm focused on the consumer sector.
Headquartered in London, the firm’s principals have been investing private equity capital together since the early 1990s and have invested over € 2.7 billion of equity in transactions totalling over € 12 billion in value.