Intersnack has reached a deal to acquire the snack unit of United Biscuits for an undisclosed sum.
The privately-held German snack group will take control of KP Snacks, the UK's second-largest snack business with an annual turnover of GBP280m (US$451.1m). The transaction includes various brands, such as McCoy's, Hula Hoops, KP Nuts and Skips and dramatically increases Intersnack's exposure to the UK market. Intersnack UK generates a turnover of approximately GBP80m.
UB will retain ownership of its baked bagged snack brands, including Twiglets and Mini Cheddars, as these are manufactured at the company's biscuit production plants.
Intersnack, a pan-European snack manufacturer, said KP Snacks was a "good fit" for its UK business as it is focused on savoury snacks. The company said it would look to grow its operations in the UK and indicated it would consider extending the KP Snack brands into new markets.
Maarten Leerdam, executive chairman of Intersnack, said: "Intersnack is a strong believer in the power of iconic, local hero brands, and we aim to leverage these strengths for further expansion. As a privately owned company, we operate our business with a long-term view. As such, the joint know-how of KP Snacks and Intersnack will drive the development of these iconic brands."
UB's private-equity owners, Blackstone and PAI Partners, put the snack arm of intersnack on the block earlier this year. At the time, sources indicated the move would allow the investors to "unlock" the value of the company and suggested the biscuits and snack units would operate more effectively on a stand alone basis.
Commenting on the move today, David Fish, UB chairman, again insisted splitting the business would strengthen both the snack and biscuit businesses.
"This exciting deal ensures that the KP brands continue as part of a major European Snacks business, which gives them the scale and support needed in a competitive market place. It also allows UB to concentrate its attention solely on continuing to develop and grow its baked biscuit and snack product range," he said.
The deal is expected to close in the first quarter of 2013.
