The Gores Group Acquires Hovis

The Gores Group Acquires Hovis

hovis nf1The Gores Group and Premier Foods have completed a joint venture transaction whereby Gores will acquire a 51% stake in Hovis, Premier Foods’ bread business.  Hovis is one of the largest bakery brands in the UK and amongst the best known food brands in the country.  Premier Foods will maintain a 49% ownership interest in the joint venture.

Hovis is an iconic UK brand of flour and bread that was founded in 1886. Hovis also makes Mothers Pride, Ormo and other retail branded bakery products and supplies flour to a range of customers under the brand names Rank Hovis, Fleming Howden and Holgran.  The company employs approximately 3,800 people at 10 bakeries, 6 flour mills and 2 regional distribution centers across the UK.  Hovis is headquartered northwest of London in High Wycombe, UK (

goni nf1“We believe there is significant untapped potential in such a well-loved, household name and are confident in the abilities of the talented management team to drive value for all stakeholders. The Gores Group has a rich history of working alongside corporate partners to unlock latent value in divisions that require operational and commercial improvement and, as such, we are convinced that Hovis offers a perfect fit for our unique capabilities,” said Fernando Goni, Managing Director at The Gores Group.

Gores will pay £30 million for a 51% controlling stake in the joint venture, of which £15m is deferred and contingent on future business performance.  Gores and Premier Foods have further agreed to support Hovis with a combined commitment of up to £45 million for the period after completion and under certain conditions. This investment, together with external financing and cash flow from the business, would be used to invest approximately £200 million over the next five years to improve Hovis’ operational infrastructure and reinvigorate the brand.

“I’m delighted that we’ve found a strong partner in The Gores Group who will help provide the investment necessary to develop the bread business,” said Gavin Darby, Chief Executive Officer of Premier Foods.  “This will be good for our customers, our employees and all those connected with the business. A joint venture arrangement also means we will share in the future gains from this investment as the business continues its return to profitable growth, helping us maximize value creation.”

The Gores Group makes control investments in non-core, underperforming or undervalued businesses in the United States and Europe. The firm maintains an in-house team of over 60 M&A and operations professionals in the US and Europe. The Gores Group was founded in 1987 and is headquartered in Los Angeles with additional offices in Boulder, CO and London, UK (

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-1-14

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