Bain Capital acquires Gail’s owner Bread Holdings in £200m deal

15-Sep-2021 - Last updated on 15-Sep-2021 at 09:10 GMT

Bain Capital Credit, in partnership with EBITDA Investments, has acquired Bread Holdings – parent company of the Gail’s Bakery chain and wholesale business The Bread Factory – from Risk Capital Partners (RCP) in a deal worth more than £200m.

Luke Johnson, chairman of RCP will retain a shareholding, believed to be around 15%, and remain on the board following the sale. EBIDTA investments is backed by entrepreneurs Henry McGovern and Steven K Winegar

RCP first backed Bread Holdings’ management team, led by co-founder and chief executive Tom Molnar, in 2011 when the group had about £25m in annual sales. The company has since expanded from seven Gail’s retail bakeries to 73, with the wholesale business providing baked goods to premium customers and supermarkets.

Overall the investment in Bread Holdings delivered a double-digit cash multiple to RCP on their original stake, it said. Based on current trading, the business has sales of over £130m annually, with the transaction valued the company at over £200m, according to Bain Capital.

Commenting on the deal, Sandro Patti, a director at Bain Capital Credit, said: “Gail’s is a premier brand in the growing craft bakery market. Its ability to supply high quality, fresh bakery products meals and drinks with a customer-focused culture drives GAIL’s strong brand following, like-for-like growth and expanding bakery network.

“We are thrilled to partner with experienced industry pioneers Luke Johnson, Henry McGovern, Steven K Winegar and Tom Molnar to support the GAIL’s Bakery and Bread Factory teams in achieving their goal of broadening access to high quality baked goods via new neighborhood GAIL’s. GAIL’s represents our third investment in food services in the past 18 months and is an important acquisition in our growing portfolio of mid-market businesses in Europe.”

Johnson commented: “We are immensely proud of the achievements of Gail’s and the Bread Factory since we first became involved, and grateful to Tom and his team for their outstanding efforts in expanding the business.

“I’m excited to remain a part of the business going forward and believe the new owners will help add considerable value in the years to come with their mission to make chef-quality craft baking more widely available.”

Molnar added: “With the completion of this transaction, I believe we have chosen the right shareholder group to support our goals and growth plans.”

Bain Capital Credit is a leading global credit specialist, while EBIDTA investments is a food ecosystem fund backed by entrepreneurs McGovern and Winegar.

Nomura and CMS acted as advisers to Bread Holdings on the transaction.

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