Tomkins has sold its Ranks Hovis McDougall food arm to venture capital firm Doughty Hanson for £1.1bn after a year of talks.
LONDON (Brand Republic) – Tomkins has sold its Ranks Hovis McDougall food arm to venture capital firm Doughty Hanson for £1.1bn after a year of talks.
The company says it wants to concentrate on its engineering and construction businesses in the US.
RHM, which manufactures Cadbury and Mr Kipling cakes, Hovis bread and McDougalls flour, will be primed for a stock market flotation within three to five years, according to new owner Nigel Doughty. He wants to relaunch it as a leading European food company, snapping up others on the way.
“It is a high-quality, successful business, and we will build on its stable of long-established brands with market-leading positions by growing the business organically and making acquisitions to expand in Europe,” he said.
He said there were no plans to cull any RHM brands: “It is business as usual.”
A spokeswoman said jobs would be unaffected at operational and managerial level.
Tomkins’ chief executive Greg Hutchings relinquished his role as executive chairman three weeks ago and is replaced by former General Electric Company finance director David Newlands.
RHM was bought by Tomkins in 1992 with yearly sales of £93m. Last year sales reached £1.6bn. Its British Bakeries arm has a 32% share of the UK bread market, while a number of plants make prepared meals for most of the country’s supermarket chains.
The deal is the latest in a spate of consolidations within the US and European food sector. Diageo sold its Pillsbury food arm to General Mills last week, Unilever bought Bestfoods in June, and Philip Morris has taken over Nabisco.