Glenboden M & A Originations

Cadbury released to focus on new acquisitions after Monkhill sale

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Origination Status seller announcement of non-core divestment, February 2008
Asset Monkhill (UK), domestic sugar confectionery producer
Buyer Tangerine Confectionery (UK), largest independent sugar confectionery maker in UK
Seller Cadbury-Schweppes PLC (UK), world’s largest confectionery company
Buyer Rationale doubling in size, brands, new categories and channels
Seller Rationale portfolio refocus on high-growth confectionery markets and categories
NBs deal allows Cadbury to meet its 2007 target of 250 mln GBP raised from divestments
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Cadbury was 50 mln GBP short of meeting its target, after raising 200 mln GBP from the sale of three non-core businesses in Italy, Australia and Canada in the middle of 2007. Having reached its income from divestments target now, Cadbury’s executives will have more momentum behind making further acquisitions in large, emerging geographies; Ukraine and Russia are sure to be on the radar screen. As for categories, gum and functional candy are preferred.

On the face of it, Tangerine has got a good deal, in acquiring the Butterkist popcorn brand, sold in cinemas throughout the UK, as well as Barratt with its iconic sherbet fountain and Jameson’s chocolate confectionery. On the other hand, they are acquiring three factories in Yorkshire; plus the fact that apparently less than half of Monkhill’s sales revenue actually comes from branded products, the rest being from private label.

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THIS LEAD'S VALUATION
Size (€ mln) 85
Sector sugar confectionery
Asset Quality UK branded and PL
Seller large plc
Buyer private equity
P/S 0,75
P/Ebitda 8,7
Type total consideration
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