Bakkavor to Float on the London Stock Exchange
Just days after announcing that it will no longer proceed with its plans for an initial public offering, Bakkavor, the UK’s leading fresh prepared foods manufacturer, has decided to apply for admission of its shares to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange’s main market for listed securities. Bakkavor expects that Admission will occur in November 2017.
The Offer will comprise a primary issue of new shares by Bakkavor to raise gross proceeds of approximately £100 million (net proceeds of approximately £90 million) and the sale of part of the shares held by Baupost (41.0% shareholder) and the founders, Agust and Lydur Gudmundsson (59.0% shareholders). The Directors believe that the offer will enable the group to further invest in the business; enable the Group to reduce its current leverage; and provide a partial realisation of the investment in the group by the selling shareholders.
Bakkavor is the leading provider in the large and fast-growing United Kingdom fresh prepared food (FPF) market and has a growing international presence in the United States and China. The group is the number one producer by market share in the UK of the four fresh prepared food product categories of Meals, Salads, Desserts and Pizza & Bread. Bakkavor had a 30% share of the UK FPF market by revenue in 2016, 3.8 times that of the nearest competitor.
The UK FPF market is expected to grow at a CAGR of approximately 5% in the four years to the end of 2019, driven by a number of factors, most notably the growing demand from consumers for high-quality, fresh, healthy and convenient food. Bakkavor’s customers include some of the UK’s leading grocery retailers, which sell the group’s products to consumers under their respective brands including Tesco, Marks & Spencer, Sainsbury’s and Waitrose. These four retailers together accounted for 70% of the UK FPF market in 2016 and Bakkavor had a 38% market share of their FPF sales.
Bakkavor’s International segment operates in the US and China. As these markets are not as well developed as the UK FPF market, Bakkavor seeks to have a transformative influence on their continued development.
