For sale soon: United Biscuits snacks
Former Kraft Foods UK president Nick Bunker's appointment as chief executive of KP Snacks on September 1 was part of this divestment strategy by UB's private equity owners Blackstone and PAI Partners, said Trefor Griffith, head of food and beverage at accountancy firm Grant Thornton.
Griffith believes a private equity buyer is more likely than a trade buyer, despite a recent report in the China Daily newspaper suggesting that China's largest beverage producer, Hangzhou Wahaha Group, had emerged as a possible contender.
Failed to find a buyer
It was said to be one of six firms that had received information from investment bank Credit Suisse, which is advising UB's owners on the disposal of KP Snacks. Blackstone and PAI Partners had put UB up for sale as a single entity in 2010 but failed to find a buyer.
Bunker has been running the Kraft and Cadbury business in the UK and Ireland for the last four years. It has a combined turnover of £2bn.
KP Snacks owns brands such as McCoy's, Hula Hoops, KP Nuts and Skips, together with a range of other brands, which are seen as ripe for development. These include: Phileas Fogg, Space Raiders, Nik Naks and Wheat Crunchies.
'Bound to happen'
Griffith said a sale of KP Snacks was "bound to happen". He added that the prospects for such a sale explained Bunker's reasons for coming on board at this time.
"It's probably because they see private equity as a route and therefore for him to lead a private equity transaction is hugely remunerative; there's a lot of money on the table," he said.
"I would have thought that something is going to happen. The fact that they have made [UB's intention to dispose of its snacks division] public will mean that everybody who would be potential acquirers both in trade and private equity (PE) will have it on their radar and will be progressing with it."
Griffith said: "I think there is further consolidation to do in the biscuit space, so I could see why PE would be interested."
