Hovis has received £80M of cash from commercial lender GE Capital to fund future growth plans following The Gores Group’s acquisition of a controlling stake in the bakery firm in January.
The cash would help Hovis improve the efficiency of its operational infrastructure, reinvigorate the bread brand and develop its range of products, such as its recently launched Taste Sensation flavoured loaves, GE Capital claimed.
“Hovis is an iconic British brand that has embarked on a new phase of growth as it looks to regain its leading position in the UK bread market,” said Adam Johnson, md, corporate structured finance at GE Capital.
“We’re pleased that we were able to provide the right type of financing package that best suited Hovis’s needs. The FMCG [fast moving consumer goods] sector is a strategic sector for us and one we feel is well-suited to the flexibility of alternative finance.”
Fernando Goni, md at The Gores Group, welcomed the funding. “We are excited about the prospects of Hovis given its strong heritage brand and talented management team, and are pleased to be working with GE Capital to develop the company into the future.
“GE Capital has a deep understanding of the UK food industry and an extensive set of financing capabilities that will help the company drive value for all stakeholders involved.”
Founded in 1886, Hovis employs 3,800 people at 10 bakeries, six flour mills and two regional distribution centres across the UK.
The company also makes Mothers Pride, Ormo and own-label bakery products, as well as supplying flour to a range of customers under its Rank Hovis, Fleming Howden and Holgran trading platforms.
Premier Foods launched its £87.5M joint venture with The Gores Group, based in the US, in January. Bob Spooner, md, bread and group supply chain director at Hovis is spearheading the business. At the time, Goni said he believed the brand had “significant untapped potential” .