Canada fund buys Burton’s and pledges expansion

Burton's chief Ben Clarke is 'delighted' with the deal. Picture: TSPL
Burton's chief Ben Clarke is 'delighted' with the deal. Picture: TSPL
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THE company behind iconic British treats such as Jammie Dodgers and Wagon Wheels has been snapped up by a Canadian pension fund in a deal thought to be worth almost £350 million.

Burton’s Biscuits, which employs some 800 workers at its Sighthill plant in Edinburgh, has been sold to Ontario Teachers’ Pension Plan (OTPP).

Jo Taylor, head of the pension fund’s London office, said the plan was to support growth plans at the business, with the possibility of using OTPP’s formidable firepower to make strategic acquisitions.

She said: “We look forward to supporting Burton’s outstanding management team to grow the business in the UK and further into overseas markets.

“There are also many strategic acquisitions to consider in those territories that can enhance these ambitious growth plans.

Former owners Apollo Global Management and Canadian bank CIBC appointed Credit Suisse earlier this year to look into the possibility of a sale as part of a strategic review. The terms of the transaction have not been disclosed, but some reports put the likely value of Burton’s at a little under £350m.

Burton’s management will maintain a “significant minority stake” in the company.

Chief executive Ben Clarke said: “We are delighted that OTPP will shortly acquire Burton’s Biscuit Company. During this process, we have met with over 30 different potential buyers and, as significant co-investors going forward, it was critical for the management team to find the right partner. With their combination of extraordinary financial firepower, true partnership approach and global expertise, it is clear to me that OTPP are the ideal partner for us.”

Burton’s is the UK’s second-biggest biscuit manufacturer, after United Biscuits. There was speculation yesterday the Canadian fund may not seek to buy United, which makes McVitie’s, Jaffa Cakes and Jacob’s biscuits.

In addition to its own brands, Burton’s makes biscuits for Cadbury, including the Caramel, Crunchie and Turkish Delight ranges. It has annual sales of around £340m.

The Edinburgh plant – one of Burton’s three across the UK – got a £5m upgrade in 2011 with the installation of equipment for wrapping biscuits in chocolate. The aim was to bring more Cadbury production to the site.

Headquartered at St Albans in Hertfordshire, Burton’s employs about 2,200 people across the UK. Its other manufacturing facilities are located in Blackpool and Llantarnam in South Wales.

Apollo and CIBC took control of Burton’s in 2009 when its previous owner, Duke Street Capital, was forced to hand over the company to the lenders who financed Duke Street’s £220m buy-out of Burton’s in March 2007. The debt-for-equity swap left Duke Street nursing big losses.

OTPP said the latest deal resulted from a competitive bidding process.