At the weekend Sky News reported that former Premier Foods chief executive Gavin Darby was working with private equity firm Cinven on an offer for the Dublin-based company, which has a wide portfolio of food brands including Kettle Chips and Rowse.
Julian Wild, corporate finance director with commercial law firm Rollits, said: “There have been reports for a few months that Goldman Sachs had been appointed to run an auction process for Valeo, which has been owned and grown through acquisition by CapVest for more than ten years.
“There will be a lot of interest from the bigger financial players as trade buyers are few and far between with these large auction processes.”
Wild said it was ‘no surprise’ that CapVest was looking to exit Valeo, adding that the investment had ‘outlived most private equity holdings’.
Commenting on the report linking Cinven with a bid, Wild said: “Valeo is made up of some well-known but mature ambient food brands, and Gavin Darby has a good deal of experience of this sector through Premier Foods.
“Private equity always looks for someone with relevant experience to lead on such bids.”
Wild believes that Valeo will sell for a substantial sum as ‘there is a lot of private equity money out there looking for a home’.
However, he added: “How much extra value there is to be gained from Valeo, which is a fairly disparate grouping of British and Irish brands, remains to be seen.
“Valeo will have had a good year on the back of the stay-home pandemic, so there may be more downside than upside.”
Current Valeo owner CapVest has made a number of recent acquisitions through another of its food companies, Eight Fifty Food Group.
In December the company, which includes Karro Food Group and Young’s Seafood, announced the purchase of Carroll’s Cuisine from Carlyle Cardinal Ireland. This followed the acquisition of Hamburg-headquartered AliSa International (trading as Greenland Seafood) in October.
Before that, in May 2020, Eight Fifty bought meat processor M&M Walshe Holdings, which was then integrated into the company’s pork division.