UK – The Spice Tailor, a UK-based meal-kits firm, has been divested to Mr Kipling’s cake brand owner, Premier Foods, for GBP43.8million (US$52.7M) on a cash and debt-free basis.
The Spice Tailor is popular with consumers who like scratch cooking and value the strong authentic flavor profiles the products produce.
The scratch recipes combine fresh ingredients with pre-prepped or pre-made ingredients that are created in India, via outsourcing to BRC recognized vendors, while operating an asset-light business strategy.
The business supplies Tesco, Sainsbury’s, Morrisons, Asda, Waitrose, and The Co-op, while also selling its products online.
London-listed Premier Foods said the acquisition of The Spice Tailor, founded by Anjum and Adarsh Sethia, is “highly complementary” to its cooking sauces brands Sharwood’s and Loyd Grossman.
The company added that the acquisition has been done at a time when consumers continue the pandemic-related trend of cooking more at home, along with an appetite for “premiumization and authenticity”.
This trend, according to Premier Foods, is a great potential for it to realize increased net sales amid the economic and supply chain challenges.
Premier noted that Spice Tailor’s products have been expanding at a CAGR of 20% over the past four years and now expects to generate a revenue of £17.3 million (US$20.7 million) in the 2022/2023 financial year from the brands.
For the year ended 31 March 2021, The Spice Tailor reported a profit before tax of GBP700,000(US$ 851,900).
Key markets for the business are the UK and Australia, accounting for respective revenue portions of 58% and 35%.
Accordingly, Premier Foods reported a 6% rise in sales in first-quarter results totaling GBP197million(US$ 239.75M), with branded growth of 4.2%.
The company noted to allude to the private labels that are becoming less of a priority, saying the focus of the business is on continuing to build the brands.
Alex Whitehouse, CEO of Premier Foods explains that the acquisition is well aligned with the company’s growth strategy and the company sees a “clear opportunity” to build on the track record of The Spice Tailor.
Premier Foods intends on doing this “by leveraging the elements of its branded growth model.”
He further explained that this acquisition represents a “highly complementary” geographical fit, and the company sees potential to expand The Spice Tailor’s distribution in all their target markets.
This acquisition marks the first full-fledged acquisition in more than a decade for the London-based company.
The last transaction struck by Premier Foods was the purchase of a 51 % stake that it did not already own in the powdered drinks and desserts business, Knighton Foods in 2016.
Other acquisitions include UK food maker and Mr Kipling owner RHM, the UK and Irish business of US-based Campbell Soup Co., inheriting the Oxo, Batchelors, HomePride, and Fray Bentos brands in 2006.
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