Strictly Embargoed until 07.00: 5th April 2017
Real Good Food plc
("the Group" or "Real Good Food")
Acquisition of majority interest in Brighter Foods Limited
("Brighter Foods" or "the Company")
Real Good Food plc (AIM: RGD) and Tywyn based Brighter Foods announce a new partnership to build on the success for the Wales based food manufacturing company, with Robin Williams remaining as CEO. Real Good Food plc has acquired an 84.33 per cent interest in Brighter Foods for total consideration of up to £9 million, on a cash and debt free basis, to be paid in two equal instalments 50 per cent on completion and 50 per cent upon finalisation of the Company's 2017/18 audited accounts. The consideration will be satisfied from the Group's existing debt facilities. The acquisition is expected to be immediately earnings enhancing to the Group.
Brighter Foods creates and manufactures snack bars for the healthy snacking market from its factories in Tywyn, Gwynedd in Mid Wales, where it is a major local employer with some 170 full-time staff. The award-winning company produces snacks which are targeted at areas such as diet control, gluten free, lactose free, low or no added sugar, sports nutrition, organic and fair trade. Brighter Foods manufactures both partner branded products and has its own healthier brands such as Wild Trail which is stocked in major retailers and health stores.
Brighter Foods commenced trading in April 2014 and has grown impressively under the leadership of an experienced senior management team, and the dedication of the skilled factory staff, led by founder and CEO Robin Williams. Following completion of the transaction senior management of Brighter Foods will retain a 15.67 per cent stake in the business (the "Management Stake").
Commenting on the transaction Robin said: "I have known Pieter for years and have worked with members of his team previously and I'm very pleased to be doing so again. They share our vision to invest in the business and to grow it further from the strong base we have established. I'll be staying as CEO and together we have already agreed a headline plan to continue growing our manufacturing facilities in Tywyn. This is great news for the town and its people. Real Good Food recognises the importance of good people in business and the importance of the factory to the local community and I am really delighted that this partnership will build on our success to date."
Pieter Totté, Executive Chairman of Real Good Food, added: "Brighter Foods fits well into our strategy to consolidate profitable well run businesses in niche areas of the food manufacturing industry. Robin and his team have achieved fantastic growth and stability in the business and we are looking forward to continuing the success story. Real Good Food investment will enable Brighter Foods to expand and improve its capacity and product range even further. We are excited about the future prospects."
The Group has also entered into a separate shareholder agreement regarding the Management Stake whereby the senior management of Brighter Foods can elect to sell 50 per cent of the Management Stake to the Group after March 2020 and 50 per cent after March 2021. The consideration for the entire Management Stake will be based upon an agreed valuation formula, linked to profit before interest and tax of Brighter Foods in the years ending 31 March 2020 and 31 March 2021 respectively, and is capped at £8 million in aggregate. Additionally the Group can elect to acquire the Management Stake after March 2021 based upon the same valuation formula. For the 12 months to 31 March 2016, Brighter Foods reported profit before tax of £2.3 million and net assets of £2.7 million as at 31 March 2016.
About Real Good Food plc
Real Good Food plc is a diversified food business serving a number of market sectors including retail, manufacturing, wholesale, foodservice and export. The Group focuses on three main markets: Cake Decoration (Renshaw, Rainbow Dust Colours), Food Ingredients (Garrett Ingredients and R&W Scott) and Premium Bakery (Haydens and Chantilly Patisserie).
Real Good Food plc
Pieter Totté, Executive Chairman Tel: 020 38573900
David Newman, Finance Director
Andrew Brown, Marketing Director
finnCap Ltd (Nomad and Broker)
Matt Goode Tel: 020 7220 0500
Daniel Stewart and Company Plc (Joint Broker)
David Lawman Tel: 020 7776 6550
Belvedere Communications (PR)
John West Tel: 020 3567 0510
Kim van Beeck