British turnaround and restructuring specialist Re:Capital is poised to buy Melbourne's Betta Foods in its second acquisition this year in Australia's confectionery industry.
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Re:Capital in February this year acquired chocolate maker Ernest Hillier and its stablemate brand Newmans in its first foray into the Australian food sector.
At the time, Re:Capital chief executive Paul McGowan signalled he was eyeing further acquisitions as the entity sought to build more scale.
It is understood to be in final negotiations with Betta Foods, whose flagship brands include Capricorn licorice and Eskimo chocolate snowballs. Betta Foods has revenues of about $40 million annually and sells a broad range of confectionery items which also includes marshmallows and other chocolate items.
The Capricorn brand of licorice products is sold in the two major supermarket chains of Woolworths and Coles, and in the Aldi chain.
Betta Foods also has a sizeable business supplying ice-cream cones to retailers and the food service market in Australia. It has a private label confectionery manufacturing business as well.
Established in 1954, the company is based in the outer Melbourne suburb of Broadmeadows and has a workforce of about 180 people. The business is believed to be controlled by a management team led by CEO Alex Sloan, after a reshuffle of interests earlier this year as it came out of private equity hands.
A private equity fund associated with Investec made an initial investment of $10 million in Betta Foods about five years ago and there have been other related entities including MGB Equity Growth which have had a large holding on the way through.
Re:Capital has been undertaking substantial restructuring over the past few months at the Ernest Hiller chocolate factory at Coburg in Melbourne's north, and the Betta Foods entity is likely to be shifted into the same holding company as Re:Capital looks to generate synergies.
