Glisten continues its acquisition drive with Dormen premium snacks deal
- September 07, 2007
||company acquisition announced, September 2007;
||Dormen Foods Ltd (UK), fast âgrowing premium savoury snacks producer;
||Glisten plc (UK), fast âgrowing confectionery and snacks group;
||founders of Dormen;
||creation of Premium Savoury Snacking Division;
||attractive valuation, timing;
||without earn-out P/S drops to 1,8 and without deferred payment P/S down to 1,3
Glisten is a compelling case of how a company can start off as a 10 mln GBP business, get a listing on an AIM exchange, make eight acquisitions, grow six âfold, and become a diversified foods group with three divisions; all in the space of only five years. Itâs also a lesson in how to adapt quickly to changes in consumer demand, towards a âbetter for youâ snacks portfolio. Anticipate more acquisitions from Glisten, with a similar theme to that of Dormen, in the near future.
Originally focused on niche confectionery products, Glisten changed its acquisition focus in 2004, to respond to the trend to healthier snacking, and created a Natural, Cereal and Fruit Snacks Division, on the basis of two new acquisitions. With this deal with Dormen, it now has added a third division, Premium Savoury Snacking. So, you could say they started with unhealthy confectionery, then went into healthier sweet snacks, and now healthier savoury snacks. Quite a âthree-leggedâ approach.
Also interesting that, although some of the companies acquired, especially the healthier ones, could be in the ânew frontierâ category, Glisten generally hasnât overpaid; Dormen is the first time theyâve valued a business above a sales multiple of 2, and that includes deferred and earn âout portions. Seems very reasonable, for a premium branded business, thatâs set to grow by 30% this year, and is profitable. Impressive also that the earn-out is only 15% of the total consideration, yet it allows Glisten to keep Dormenâs foundersâ talents until 2009
At the same time, Glisten has not neglected organic growth or profitability, as some groups do that grow at a great, debt âfuelled speed, through a string of acquisitions. Organic growth for the group is 10% p.a., and the EBITDA margin was a healthy 15% in the last financial year.