Hicks Muse takes the biscuit again

Hicks, Muse, Tate & Furst is set to become the owner of the number two player in the UK biscuit market. At the end of October, Hicks Muse completed the acquisition of Burton’s Biscuits from Associated British Foods for GBP130 million on a debt-free basis. Hicks Muse now plans to merge Burton’s with existing portfolio company Horizon Biscuits, which the firm acquired via its high-profile public-to-private buyout of Hillsdown Holdings, following a bidding battle with Candover, in June last year. Burton’s, manufacturer of childhood favourites Jammie Dodgers and Wagon Wheels as well as other leading brands, had sales of GBP172 million in the year to September 1999. When Burton’s and Horizon are merged, the combined group will enjoy a share of around 20 per cent of the UK biscuit market: as well as leading brands such as Cadbury, Maryland, Wagon Wheels and Jammie Dodgers, the enlarged company will rank as a major supplier of own-label biscuit products to major supermarket chains.

Against the background of a consolidating biscuit industry, Horizon constituted an obvious platform for a buy-and-build strategy. Hicks Muse partner John Muse says the merger of Horizon and Burton “will strengthen our partnership with the major retailers and create a company that is well positioned for long-term growth”.

Further acquisitions for the Horizon/ Burton combine appear to be on the cards, judging from comments by Dean Metropoulos, non-executive chairman of Hillsdown and a Hicks Muse management affiliate, who says: “We are looking forward to working with the management teams of both Burton’s and Horizon in implementing our buy-and-build strategy in this dynamic category”.