www.rollits.com March 2012 Food Group Focus

Whatever happened to the quoted food sector? 2012 certainly got off to a lively start with Müller’s £280m agreed takeover bid for leading British liquid milk processor Robert Wiseman Dairies, following rumours last year that Müller had also been interested in the other quoted liquid milk company, Dairy Crest. Given the strength of Müller’s position in the UK yogurt market, it is perhaps not surprising that the company should be keen on extending its dairy reach into liquid milk in this country. However, Müller’s tremendous success in yogurt has come with the strength of its brand and innovative products. The liquid milk market here is very largely retailer own label and hugely competitive.

The Food Producers Index of the The Christmas trading figures from the Stock Exchange used to be populated by major multiples hardly set the Stock the titans of UK food manufacturing with Market on fire and the overriding focus companies such as United Biscuits and on price in recent years is starting to Rank Hovis McDougall being household show the strain. Long gone are the days names which would have figured in many when the most innovative retailers like a share portfolio. The businesses and the Marks & Spencer relied on a close products may remain, but the Index is partnership with their main suppliers now a pale imitation of what it was in the such as Northern Foods and Geest. In 1990s and before. its place has come the constant round of price tendering which has squeezed Giants Unilever and Nestlé apart, there are so much innovation and investment out still some substantial listed food plcs such of the industry. as Associated British Foods, Cranswick, Kerry and Tate & Lyle. But takeover But the UK is still a great place to do speculation has surrounded others like business with arguably the best retailers Dairy Crest and Greencore, whilst debt- in the world. So it will be interesting to laden has been forced into see whether Müller’s takeover of a series of disposals under new Wiseman is the forerunner of more The leading UK retailers (if not dairy management. It seems inevitable that the acquisition activity by foreign buyers in farmers) will be pleased to see three list of quoted food companies will shrink the British market. strong liquid milk players remaining after further in the next few years. the Wiseman deal (Dairy Crest and Arla being the others), as the chilled own label Almost certainly the power of the big sector saw some marked consolidation four UK retailers, Tesco, Asda, Sainsbury’s Also in this issue last year: the takeover of Northern Foods and , together accounting for by 2 Sisters Food Group, the acquisition 76% of British grocery spend, has made Month by month guide to mergers of Uniq by Greencore and Premier Foods’ the Stock Market wary of the prospects and acquisitions Brookes-Avana also going to 2 Sisters. So of UK food manufacturers, with some is this a sign that, in chilled private label justification. Should this be a concern? Rollits advises Riverford Organic at least, food manufacturers believe that Yes, it should be. Britain needs a strong on BoxFresh deal scale is vital in dealing with the major food manufacturing industry to reduce Top chef Tim Bilton collects multiples? Perhaps another explanation is air miles, generate exciting product Champion award that the demise of Northern, Uniq and development and innovative new brands, Wiseman is down to the parlous state of and create the large number of jobs The Pipe and Glass Inn named the quoted food producers. which food production requires. Michelin Pub of the Year 2012 Page 2 Food Group Focus March 2012

Month by month guide to mergers and acquisitions

Fats and oils supplier AAK, which has a Sausage casing manufacturer Devro sold its May 2011 major UK presence, acquired US flaked German division to Visko Teepak of Finland. Wynnstay Group announced that it had shortenings maker Golden Foods and YFM Equity Partners backed Andy acquired Wrekin Grain , a grain marketing Golden Brands in Kentucky. and agricultural inputs supplier based Micklethwaite in a MBI at Leeds-based bagel in Telford. The Cake Bake Company , best known for bakery and retail business Bagel Nash . the Skoda car cake and based in Kent, was Mr Micklethwaite’s former business, Leeds-based GT Produce bought Kent sold to West Midlands bakery, Baker Boys, Symington’s, agreed a deal with Unilever business RS Fruits to expand its fresh after going into administration. produce wholesaling activities. to acquire the brands Chicken Pemberton Capital acquired a controlling Tonight and Ragu. Loseley Dairy Ice Cream went into stake in Mathiesons Foods , the Scottish Kraft Foods announced plans to split in two, administration with the loss of up to 83 baker, which had been bought out of one half being a global snacks business, jobs in Cwmbran. administration by a management team including , and the other being its in 2010. Andrew Jones Pies in Huddersfield was North American grocery business. the subject of a pre-pack and continues to trade as AJ Pies and Pastries. July 2011 Northern Irish meat products business US private equity firm Blackstone Group, Millar Savoury Foods was wound up after Soft drinks company Britvic acquired part-owners of United Biscuits, bought a administrators failed to find a buyer. wholesale distributor Quinns of majority stake in Blackpool-based Cookstown from C&C Northern . Valeo Foods, backed by Origin Enterprises Tangerine Confectionery , the UK’s largest and Capvest, agreed the purchase of another sugar confectionery and branded popcorn Bottlegreen Drinks , controlled by Piper Irish food company, Jacob Fruitfield , owners manufacturer, providing an exit for Growth Private Equity, was sold to Northern of Jacob’s biscuits in Ireland, creating a group Capital Partners. Ireland’s SHS Group. with sales of €300m. French dairy group Lactalis acquired Italian agreed to acquire a 51% US cereals manufacturer Ralcorp agreed dairy company Parmalat , in which it already controlling interest in French yogurt maker to buy Sara Lee ’s North American dough owned 29%, in a deal worth €3.4bn. Yoplait and a 50% stake in the related entity business for $545m. which holds the global Yoplait brands. Sodiaal Nestlé paid €1.2bn for a 60% stake in retains the ownership of the remainder. Leading Chinese company Bright Food Chinese confectionery company Hsu Fu Chi . agreed to acquire a 75% stake in ’s Luke Johnson’s Risk Capital Partners Swiss-based chocolate maker Barry Manassen Foods for $416m. acquired a large stake in London artisan Callebaut agreed the sale of its European baker Bread and its wholesale business The Christian Rose led a MBO of gin and vodka consumer business Stollwerk to Belgium’s Bread Factory and the Gail’s café estate. supplier Greenall from the De Vere Group Baronie Group. to create G&J Greenall Group. Leading egg company Stonegate acquired Greencore made a successful cash offer Monmouthshire egg supplier Farmhouse Young & Co sold its 40% stake in Wells & of £113m for chilled foods group Uniq , Freedom Eggs . Young’s, its JV with Charles Wells, to end shortly after which Uniq announced the brewing after 180 years and focus on its pub end of yogurt and everyday desserts Dairy cooperative First Milk acquired estate. Soon after, the McEwan’s and production at its Minsterley site. Kingdom Cheese , a supplier of mozzarella Younger’s beer brands were bought by Wells cheese and cheddar mixes, and Kingdom Wessanen, owner of Kallo Foods, sold & Young’s from Heineken UK for £20m. Dairies , a producer of cottage cheese and its subsidiary Tree of Life UK to a MBI soft cheeses, based in . Private equity firm Permira sold animal feed team led by Mike Cole, Chairman of producer Provimi to US agrifood giant Brands of Distinction. June 2011 Cargill in a €1.5bn deal. In the Republic of Ireland Musgrave Group, Grocery retailer Haldanes Stores , formed in SABMiller made another hostile takeover owners of the Supervalu brand, agreed to 2009 and with 600 employees, went into bid of A$9.9bn for Australian beer group buy rival Superquinn in administration. administration, followed later by Ugo Stores . Foster’s and received shareholder approval Lincolnshire-based The Original Cake Major UK dairy company Dairy Crest in December. acquired MH Foods in Erith, Kent, a Company acquired Special Little Cakes Acquisitive Israeli flavours company Frutarom manufacturer of spray cooking oils and in Nottinghamshire. acquired Hertfordshire flavours business salad dressings, for £13m. Life-science business Provexis agreed to Aromco for £15m. Ray Coyle, the founder of Ireland-based buy Science in Sport , which supplies sports Grimsby-based fish supplier Superior Largo Foods , agreed to sell a 25% stake nutrition products, for £8m. Seafoods went into administration. in the company to German snack company Nutricia Advanced Medical Nutrition, part Intersnack, which already owned 15% Bacon supplier Becketts Foods , based in of Danone, acquired Complan Food UK , of Largo. Coventry, was acquired by CPC Foods, the nutritional supplements business. whilst Denbighshire seed and fruit bar Associated Seafoods bought prawn business Wholebake was the subject of Carr’s Milling Industries in Carlisle sold its supplier Moray Seafoods and smoked a MBO. Carrs Fertilisers division to Irish salmon processor Lossie Seafoods , both agribusiness, Origin Enterprises, for £19m. based in Buckie. Protexin acquired another digestive products maker, The Healthy Bowels Company , Princes completed the acquisition of Premier owners of Lepicol. Foods ’ canning operations at Long Sutton and Wisbech in East Anglia. September 2011 Attempts to find a buyer for Stilton producer New Zealand dairy company Fonterra Quenby Hall Dairy in administration failed. announced a JV with UK dairy cooperative First Milk to develop premium whey August 2011 proteins within Europe. In another JV, Japanese brewing company Kirin bought Essex-based grain and bakery ingredients out a majority shareholder in Brazilian supplier Edme joined with Dutch brewer Schincariol for $2.6bn. brand CereX . Page 3 Food Group Focus March 2012

brands, including Chivers and Gateaux, to November 2011 The Boyne Valley Group for just under £35m. C&C Group, the Irish maker of Magners cider, agreed to acquire Hornsby’s , the second- PK Foods, the former Pasta King, acquired largest US cider brand, based in California. Chester-based Tasties , a sandwich supplier into the healthcare and education sectors. Donegal Creameries acquired AJ Allan Seed Potatoes , based in Brechin. Compass Group announced the acquisition of Czech foodservice business Sara Lee completed the sale of its American DORA Gastro . Fresh Bakery business to Mexico’s Grupo Bimbo for $709m and also agreed the sale The merger was announced of Swedish of its fresh bakery business in Spain and confectionery businesses Cloetta and Leaf Portugal to the same buyer for $154m. in a €753m deal. Liverpool-based Bibby Line Group Japan’s Mitsui sold Bracknell canned fish concluded the acquisition of Yorkshire business MCM Select Foods and a sister convenience retailer Costcutter . operation in Holland to private equity firm R&R Ice Cream announced the purchase Manfield Partners. of Pilpa , the ice cream division of Maison Robert Wiseman Dairies formed a JV with Boncolac, based in Carcassone, for New Zealand milk company A2 Corp to January 2012 develop a range of products for lactose €17.7m stock. Israeli ingredients company Frutarom added intolerant consumers. Bakkavor sold its fish spreads business in another acquisition with the purchase of to seafood company Alfesca, majority company acquired canned Essex-based Savoury Flavours in a deal owned by French co-operative Lur-Berri. business from Princes, worth just under €5m. a disposal required by the competition Another active acquirer, Tangerine Kerry acquired SuCrest , the sweet ingredients authorities following the acquisition of Confectionery, picked up sugar confectionery business with production in Germany and Premier Foods’ canning businesses. Belarus and sales of €50m. Shortly afterwards, brands Smith Kendon Travel Sweets and it was announced that Kerry would buy Cooks the Bakery , a retailer of bakery York Fruits . products, went into administration. Cargill’s global flavours business for $230m. Tyrrells, the maker owned by Berwyn Bakery in Bala, North Wales, was Tulip, the UK arm of meat giant Danish Langholm Capital, acquired vegetable crisp sold out of administration to a MBI team, Crown, bought West-Yorkshire-based producer Glennans . Parkam Foods , including sandwich maker whilst Wrexham-based distributor Willow Cumbria’s Turbo Drinks , makers of Turbo Freshway Chilled Foods. Foods was bought by Birchall Foodservice. Shandy, was acquired by a team including Ethnic breads business Honeytop Speciality Dutch private equity firm Gilde bought Welsh rugby players Gareth Thomas and Foods was bought by Swiss food business German frozen food operator Eisman from Gareth Williams and will move to Bridgend. Intermediate Capital Group. Aryzta, owners of Cuisine de France and PAI sold its final 25.7% stake in Christian Delice de France. Bakery Products bought the assets of Hansen to privately-held Novo A/S Cumbria beef abattoir firm Duerden Lindal Hobson Foods in administration, trading as for €560m. Tinsdale & Stanton in County Durham. Moor was acquired by Dawn Meats. The Co-operative Group bought Scottish Countrywise Water Coolers announced a independent retailer David Sands with October 2011 merger with North Yorkshire water distributor 28 stores. Tangerine Confectionery acquired the Chilburne Spring . Highland toffee and Wham brands from New East Kilbride liquid milk processor Robert McCowans after the Stenhousemuir-based Wiseman Dairies agreed a £280m takeover business had gone into administration. by Müller, offering shareholders a 60% premium on the pre-bid share price. US natural foods business Hain Celestial, best known in the UK for the Linda Esher-based cake company Cookie Man McCartney range of frozen vegetarian meals, was bought out of administration by Dutch bought Daniels Group , owners of New bakery business CSM. Covent Garden Soup and Johnsons fruit Aberdeenshire soft drinks producer Sangs , juices, for £144m. maker of Macb flavoured water, and Fife- Greencore announced a takeover approach based Kingdom Bakers were both placed after movement in its share price, but into administration. revealed in December that discussions had December 2011 Multiple retailer Morrisons added to its own been ended. R&R Ice Cream continued on the acquisition manufacturing capacity, buying a fresh pork trail, buying Bremen-based ice cream and lamb processing plant at Winsford in Crewe-based meat company Heathfield manufacturer Durigon Gelato . Foods was acquired by Irish food Cheshire from Vion . business Dunbia. Royal Bank of Scotland sold 918 tenanted Flour millers Whitworth Bros acquired pubs to Heineken for £412m to end its time the assets of Smiths Flour Mills in Leicestershire desserts and savouries as one of Britain’s largest pub landlords. manufacturer Barton & White was acquired administration with mills in Worksop, by Redditch-based Proper Pies, part of Oliver Cumbrian Seafoods in administration, with Langley Mill and Holbeach. James Foods. sites at Seaham, Whitehaven and Amble, Vestey Foods Group bought Royal Warrant- was sold to Capital, owners of Young’s holding online meat supplier Donald The Competition Commission cleared Seafood, later shedding up to 550 jobs. Kerry Group’s takeover of frozen ready Russell with sales of £30m. meals competitor Headland Foods , a deal In another fish deal Whitby Seafoods Dutch confectionery company BIP acquired signed back in January which provoked acquired County Down scampi rival Derbyshire-based What Next Candy , a retailer complaints. In February 2012 Kerry Rockall Seafoods . supplier of children’s novelty and character commenced consultation on the closure of Premier Foods agreed another disposal licensed confectionery. the Headland factory in Grimsby. with the sale of its RF Brookes chilled meals In the US Ralcorp completed the spin-off of Members of Nisa-Today’s voted for Today’s and Avana Bakeries businesses to 2 Sisters its Post cereals business, acquired from Kraft Wholesale Services to separate, leaving Nisa Food Group for £30m. This was followed in 2007. with its 950 retail members. shortly after by Premier selling its Irish Page 4 Food Group Focus March 2012

Rollits advises Top chef Tim Bilton collects Champion award Riverford Organic on BoxFresh deal Rollits Food Group advised Riverford Organic Vegetables on its acquisition of BoxFresh Organics and its wholesale arm Flights Orchard Organics.

Julian Wild (on the left), presenting to Tim Bilton The excellence of Yorkshire’s food businesses was on full display at the seventh annual deliciouslyorkshire awards on 14 November 2011.

Over 400 guests at Rudding Park, resident foodie Nigel Barden and Nick Harrogate, saw top Yorkshire chef Tim Stafford of Hambleton Ales. Bilton, from gastropub The Butcher Arms in Hepworth, collect the prestigious Deliciouslyorkshire Chair Cath Clelland deliciouslyorkshire Champion Award said: “ Year on year the quality of entrants sponsored by Rollits for his contribution has been exemplary and reinforces to the region’s food and drink sector. The Yorkshire’s position as a leading force in evening was hosted by BBC Radio 2’s the UK’s food and drink sector. ” Nasim Sharf and Julian Wild of Rollits LLP The Pipe and Glass Inn Riverford is the UK’s largest box scheme supplier of organic fruit, vegetables and named Michelin Pub Information other food and BoxFresh is the third If you have any queries on any articles in largest box scheme operator with bases of the Year 2012 this newsletter please contact: Julian Wild in Shropshire and Herefordshire. on +44 (0) 1482 337304 or email The 2010 winner of the deliciouslyorkshire [email protected] Champion award, also sponsored by Riverford is headquartered at Wash Farm This newsletter is for the use of clients Rollits, was James Mackenzie of Michelin- in Devon and has other sites at farms in and will be supplied to others on request. starred The Pipe and Glass Inn at South Cambridgeshire, Yorkshire and It is for general guidance only. It provides Dalton, near Beverley, in East Yorkshire. useful information in a concise form. Hampshire, enabling Riverford to provide Action should not be taken without national coverage of organic vegboxes. Now The Pipe and Glass Inn has been obtaining specific advice. We hope you named Pub of the Year in the 2012 edition have found this newsletter useful. Riverford’s MD Jack Slatter commented: If, however, you do not wish to receive of the Michelin Eating Out in Pubs Guide. “We are a good fit with BoxFresh further mailings from us, please write to customers and, in areas we already Mrs. Pat Coyle, Rollits, Wilberforce Court, Rebecca Burr, editor of the guide, said: High Street, Hull HU1 1YJ. operate in, it will double our “This award is given to a pub which we The law is stated as at 1 March 2012. wholesale business. ” feel offers something extra special. Here it is a combination of factors which Hull Office Rollits’ Food Group Director, Julian Wild, Wilberforce Court, High Street, include the warmth of the welcome, the said: “ Rollits has developed a strong Hull HU1 1YJ friendliness of the staff, the character of reputation for working with a wide range Tel +44 (0)1482 323239 the place and, of course, the food. of high quality food companies. Although York Office The Pipe and Glass Inn is a wonderfully we are based in Yorkshire, with offices in Rowntree Wharf, Navigation Road, warm pub and nothing is ever too much York YO1 9WE Hull and York, this was an excellent trouble for the owners. ” Tel +44 (0)1904 625790 opportunity to work with the leading box scheme company in the country, located www.rollits.com near Buckfastleigh in Devon, to acquire a Authorised and Regulated by the Solicitors business based in Ledbury, Herefordshire. Regulation Authority under number 524629 Rollits is a trading name of Rollits LLP. “Riverford is a tremendous business and Rollits LLP is a limited liability partnership, we are delighted to have worked with registered in and Wales, them on this transaction. ” registered number OC 348965, registered office Wilberforce Court, High Street, Hull HU1 1YJ. The legal work on behalf of Riverford was led by Rollits’ corporate partner Nasim A list of members’ names is available for inspection at our offices. We use the term Sharf with assistance from John Flanagan. James and Kate Mackenzie with Julian Wild ‘partner’ to denote members of Rollits LLP.