UK F&B merger and acquisitions activity at its highest since 2010

A new report has revealed that mergers and acquisitions activity in the food and beverage (F&B) industry was at its highest in 2021 since 2010.

The report from corporate finance advisory firm Oghma Partners shows that in the last quarter of 2021 alone there were 29 transactions in the F&B sector, which is 50.8 per cent higher than in 2020.

“The total deal value for T3 2021 was estimated at £722.1 million [US$970.8 million],” the report reads. “This boosted the 2021 annual deal value to an estimated £6.6 billion [US$8.9 billion], which is the largest annual deal value we have recorded since 2010.”

“Driving this activity is the relative defensiveness of the sector’s cash flows, combined with loose monetary policy, which has led to an inflow of funds into private equity companies as well as a low cost of debt,” the report continued.

The report showed that overseas buyers accounted for 39.1 per cent of total deal volume which was the highest percentage of non-UK corporate buyers involved in UK F&B deals since 2010.

The plant-based sector also saw a boost in activity last year with Portuguese conglomerate, Sonae, acquiring the UK producer of vegan sausages, burgers and falafels Gosh Food, however, Oghma also pointed out that sell-off in Oatly shares (IPO in May 2021) and Beyond Meat (IPO May 2021) were due to disappointing revenue numbers which could impact valuations in the plant-based sector in the future.

Direct-to-consumer sales channels also proved to be popular last year with Nestle’s acquisition of SimplyCook which followed its acquisition of Mindful Chef, at the end of 2020. Italian pasta giant, Barilla, also acquired a majority stake in a meal kit start-up called Pasta Evangelists.

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