date:Jan 28, 2014
Premier Foods will establish its bread unit as a stand-alone joint venture, with US private equity firm Gores Group taking a majority stake in the business.
Gores will pay GBP30m (US$49.6m) for 51% in the new company, Hovis Ltd. Of this, GBP15m will be deferred and is dependent on Hovis' future performance.
The deal values the bread business at an enterprise value of GBP87.5m Premier said, representing around 4x EBITDA generated in 2013.
According to Premier, the agreement will allow the ne