Promise Gluten Free sells majority stake to UK private equity firm
The deal is expected to value the Irish speciality baker at around £89m ($115.97m).
Promise Gluten Free was founded in 2011 by Declan Gallagher, Tom Doyle and Ciarán Lally and is said to have “experienced rapid growth both domestically and internationally”.
It specializes in producing breads suitable for celiacs under retail brands Promise Gluten Free and PureBred Gluten Free. It sells to more than 1,000 stores in Australia, as well as the US, Ireland and the UK in major retailers like Marks & Spencer, Sainsbury’s, Spar, Woolworths and Tesco.
Promise recently won a contract to supply gluten-free bread to 10,000 outlets in Canada.
Expanding global footprint
According to Gallagher, MEP’s backing will provide Promise Gluten Free the impetus to accelerate its international expansion strategy.
“Plans are in place to further develop Promise’s physical presence in the US and European markets to meet fast-growing demand,” he said.
The global market for gluten-free products market is projected to reach $7.59bn by 2020, growing at a CAGR of 10.4% from 2015, forecasts MarketsandMarkets.
The market researcher expects the European region to be the fastest-growing market owing to the health concerns in the region.
The incidence of coeliac diseases and gluten intolerance has risen considerably over the last few decades, however, the trend has benefited from broader audience trying to avoid gluten for health reasons.
Board changes
In addition to the investment, Promise is also making changes to its board.
Robert Leechman – who has over 35 years in the consumer goods sector – has been appointed chairman, while former CEO of United Biscuits Jeff van der Eems is joining as a non-executive director.
MEP’s acquisitions
MEP’s managing partner, Daniel Sasaki, said: “Promise is attracting international attention as it continues to build sales momentum as an innovator in the sector. We see the same potential for exceptional growth in Promise that we identified in our previous successful investment with Fever Tree.”
The London-based private equity firm was launched two years ago by three former employees of Lloyds’ private equity arm, LDC.
To date, MEP has invested just over 50% of its £400m ($521.22m) debut fund, and hopes to deploy another 10% in “at least one or two” more deals this year.
