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Burtons Biscuit Co.

Evaluation of

Sector:

Snackfood

Markets Covered:

UK

Summary:

We provided commercial and operational due diligence for a private equity bidder in the Burtons Biscuits sale process.

Details

Burtons Biscuit Co.was the No. 2 UK biscuit producer, owning the Maryland, Jammie Dodgers and Wagon Wheels brands and licensing the Cadbury brand for chocolate biscuits. It operated predominantly in the UK with export business to Europe and North America.

We were appointed by one of the private equity funds participating in the process to provide operational due diligence and, alongside another consultancy, commercial due diligence. Our primary role on the commercial due diligence was to lead on customer perception of the business and risks and opportunities in international markets and to provide a perspective on market outlook and the business performance and plans. We supplemented our core team by bringing in Associates with expertise in UK bakery operations, and UK and North American Sales and Trade contacts.

We reviewed the IM, VDD and the data room material and attended management presentations. Using our deep experience and knowledge of the category space, we evaluated the business performance to date, determining the principal drivers of profit growth, and assessed the plans for the business.

The business had a strong record of new product development which remained a key part of its continued success. We developed a view on the new product pipeline and commercial outlook of the business.

We conducted a broad range of customer interviews to provide insights into trade relationships and our international associates reviewed market activity on the ground, interviewed distributors and customers and provided additional insight into the outlook for international trading.

The business had also demonstrated a strong record of value-engineering initiatives in the two years leading up to the sale process and we developed a view on the sustainability of further value engineering and value management initiatives within the plan.

On supply chain due diligence, our supply chain experts visited the sites and reviewed their performance and cost reduction achieved to date. We evaluated the procurement operation and cost reduction, continuous improvement and capital investment plans. We identified and quantified risks and opportunities within the cost reduction strategy.

We identified buy and build opportunities based on our knowledge of industry participants and estimated synergies available on acquisition in each case. We used our network to introduce our client to strategic partners of the business to enable them to draw conclusions on the strategic options for the business in terms of buy and build acquisitions and exit. We also provided an assessment of the risks and opportunities associated with the critical Cadbury licence.

We presented our conclusions to our client in regular reports and updates as well as a co-branded final report which was made available to lending banks.