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Blackstone Group realises Tangerine dream

By Ben Bouckley , 04-Jul-2011
Last updated the 04-Jul-2011 at 17:52 GMT

US private equity firm Blackstone Group has bought a majority stake in Blackpool-based Tangerine Confectionery, FoodManufacture.co.uk understands, while management has also reinvested in the firm.

Tangerine chair Steven Joseph (pictured) said in a statement that Blackstone – which owns United Biscuits – had taken over from Growth Capital Partners (GCP) as the firm’s financial partner.

As the UK’s largest sugar confectionery and branded popcorn manufacturer, Tangerine turned over almost £160m last year. Its brands include Barratt Sherbert Fountain, Butterkist Toffee Popcorn and Princess Marshmallow. The company also manufactures own-label products.

Business as usual

Joseph said: “Growth Capital has been a fantastic support to Tangerine Confectionery since the company’s creation in 2005, helping us to become Britain’s largest independent popcorn and sugar confectionery manufacturer.

“Our new partners have invested in 150 businesses in the last 25 years, including organisations such as United Biscuits and The Merlin Entertainment Group. We believe Blackstone are the right people to help us achieve the next phase of our ambitious growth plans.

“They are very supportive of our business strategy in these challenging economic times and so it will be ‘business as usual’ within Tangerine.”

An informed source told FoodManufacture.co.uk that as a private equity business Blackstone had a good track record for backing strong management teams and companies with a good platform for growth.

Planned acquisitions?

He added that Blackstone would also apply a ‘buy-in-and-build’ ethos to Tangerine, pursuing organic growth "but also acquisitions, for sure”.

Joseph told our sister title The Grocer in February that Tangerine was searching for European acquisitions that would provide it with a manufacturing base close to the Benelux countries, France, Germany, Italy and Spain.

GCP originally bought a 41% stake five years ago, while management reportedly held a 54% major stake in Tangerine before the current deal; Danish chocolate manufacturer Toms held the remaining 5%.

The sale represented a fourfold return on its investment over five years, GCP said today, after it initially backed a £10m management buy-in of Toms Confectionery (later rebranded as Tangerine). From January 2006 to July 2011, GCP said Tangerine increased its turnover from £40m to £160m.

A GCP spokeswoman added that, given the success with Tangerine, the firm could target small-to-medium sized enterprises with strong growth potential in the food sector, through a recently raised £160m fund.

Last October, Tangerine appointed investment bank Rothschild to look at growth options on its behalf, and said in May that, while it had enjoyed a positive partnership with GCP, the confectioner “far exceeds the size of business that this investor typically invests in.”

Tangerine employs around 1,300 staff and has factories in Blackpool (two), Pontefract, York, Cleckheaton, Liverpool and Poole.