Food & Beverage sector M&A snapshot

2021 UK Private equity investment review

Following our 2020 review, we present a review of the highlights of 2021 from the perspective of private equity related investment activity in the UK food & beverage market.

2021 saw the UK and world economy continue to be affected by COVID-19, whilst at the same time, private equity firms globally had also accumulated record levels of undeployed capital, with their purchasing power magnified by low interest rates.

The changing restrictions, altered social and working patterns resulting from the pandemic have heavily influenced consumer spending habits and demand for goods and services. As well as leading to a wide array of differing performance and prospects for businesses operating in the food and beverage sector, the disruption has also been a driver for a very active M&A market.

We include 26 private equity related investments into UK food and beverage companies in 2021, compared to 18 deals in 2020. This increase highlights the heightened confidence and activity of private equity in the food and beverage market, particularly following a reduction in M&A activity at the start of the COVID-19 pandemic in 2020, when for a period of time private equity firms were more focussed on managing existing portfolio companies rather than making new investments.

UK Food & Beverage private equity 2021 investments in numbers.

1. Category trends

The three largest categories of deal activity for private equity investments in 2021 were snacks, baked goods and pet food, with snacks and pet food also featuring in the top three categories in 2020.


Snacking products have experienced a boost in demand during COVID-19 due to the impacts on social and working patterns, with significant private equity investment in the sector in both 2020 and 2021.

There were six deals in the snacks category in 2021:

  • Valeo Foods, which was itself acquired by Bain Capital during 2021, made two acquisitions in the branded snacks sector:
    • Freshers Foods, which produces the Openshaws and Freshers brands of pub snacks, including pork scratchings
    • New World Foods which sells branded meat snacks, including biltong and beef jerky
  • Exponent acquired the popcorn and snacks brand Proper, with the intention to combine this with the previously acquired Eat Real business
  • Elysian Capital supported two transactions, initially acquiring Wholebake, a private label manufacturer of cereal bars from previous owner Bridges Fund Management, and subsequently bolting on Deeside Cereals, a manufacturer of snack bars as well as breakfast cereals
  • S-Ventures acquired the cereal bar brand Pulsin

Baked goods

Baked goods was the second most active category in 2021 with five private equity backed deals:

  • Compleat Food Group (itself backed by PAI Partners in 2020), acquired Wrights Food Group, a manufacturer of pies, pastries and desserts
  • Bain Capital acquired Bread Holdings, which operates Gails Bakery and The Bread Factory
  • Endless-backed Bright Blue Foods acquired Sargents Bakeries
  • Limerstone Capital Partners acquired Village Bakery
  • Development Bank of Wales acquired Just Love Food Company in an MBO

Pet Food

Pet food companies continue to attract interest from private equity following several years of both corporate and private equity activity in the category. The private equity backed deals in 2021 were:

  • Pet Food UK was acquired by Inspired Pet Nutrition, itself a portfolio company of CapVest
  • Town and Country Petfoods, which operates the Hi Life brand, was acquired by Harwood Private Equity backed Assisi Pet Care
  • Dogmates, the owner of the Butternut Box brand, raised £40m in a fund-raise, led by L Catterton

2. Proposition – brands leading the way

As was also the case in 2020, the majority (16) of the transactions related to primarily or entirely brand-led product propositions, as investors seek to capitalise on the increased demands for brands which resonate with consumers, particularly for home consumption.

There were five deals for companies focussed on B2B sales, with two of these deals being in the specialist food ingredients sub-sector. Three transactions related to businesses focused largely on private label products.

There were two new food retail transactions announced in the year, with three closing, including two major multiple grocers which operate major food manufacturing divisions:

  • Wm Morrison Supermarkets was acquired by US-based Clayton, Dublier and Rice;
  • The previously annouced acquisition of ASDA by the Issa Brother and TDR capital in 2020 closed in 2021

3. Private equity as a consolidator

Just under half (12) of the deals were bolt-on transactions to existing PE-backed food platforms, representing the continued trend of PE acting as consolidators in the F&B sector, with bolt-on transactions accounting for over half of the deals last year.

Bolt-on transactions continue to represent an attractive strategy for PE as they support the potential for faster growth as well as significant synergies.

In particular, Exponent and Valeo Foods (now backed by Bain Capital, previously backed by CapVest), have been notably active in the food and beverage sector recently with buy and build strategies.

4. The UK continues to be an attractive market

UK food and drink businesses continued to attract interest from overseas financial (as well as trade) buyers, with 10 of the private equity related investments in 2021 being funded by overseas firms, building on 6 of the 18 deals in 2020.

5. Public to private trend

2021 witnessed a large number of UK listed businesses across many sectors being acquired into private ownership. The food and beverage market was not immune to the trend, with Stock Spirits Group and Wm Morrison Supermarkets being acquired by private equity firms during the year.

6. Exit trends

There have been a number of high profile private equity exits from food and beverage investments in 2021, including for example:

  • Mondelez’s acquisition of Grenade from Lion Capital
  • Newlat Food acquisition of Symington’s from ICG
  • Sofina Foods acqusition of Eight Fifty Food Group from Capvest Partners
  • Nestlé’s acquisition of Simply Cook from Octopus Ventures


Sources: Mergermarket, Pitchbook, press reports & Deloitte

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