Houlihan Lokey Advises Mitsubishi Corp.

Houlihan Lokey is pleased to announce that our client Mitsubishi Corp. (Mitsubishi) has sold Princes Group (Princes), one of the U.K.’s largest food and drink groups, to Newlat Food S.p.A. (Newlat) for a total consideration of £700 million. The transaction was completed on 25 July 2024.

Founded in 1880 and headquartered in Liverpool, Princes is an international food and drink group manufacturing branded and private-label products in several categories, including ambient food, fish, drinks, oils, and Italian products. Princes was acquired by Mitsubishi in 1989 and has shown impressive growth from c. £150 million to c. £1,800 million in revenue.

Founded in 1918, Mitsubishi is Japan’s largest conglomerate trading company with revenues of approximately $100 billion, a market capitalization of approximately $40 billion, and more than 80,000 employees. It operates in 10 business groups across virtually every industry, including chemicals, energy, food, retail, and finance.

Newlat is an international agro-food group with a strong heritage. It produces and distributes dairy, baby food, pasta, bakery, gluten-free, instant hot snacks, and other specialty food products mainly under its own brands as well as private label. Newlat has operations in four countries, namely Italy, the U.K., Germany, and France, through its subsidiaries Centrale del Latte d’Italia, Symington’s, Newlat GmbH, and EM Foods. Newlat and Centrale del Latte d’Italia are both listed on the Milan Stock Exchange.

The transaction value of £700 million represents a multiple of 7.0x EV/FY24 EBITDA, of which £650 million will be paid in cash and £50 million in Newlat shares. Following the completion of the intended acquisition of Princes, Newlat will become the New Princes Group. Princes will retain its identity and operate as a subsidiary of the New Princes Group. The newly formed group will have a global operating network of 31 factories and a diversified portfolio across 10 distinct categories. Combining these two large businesses would create a leading player in the European food industry with a revenue of c. €2.8 billion and an adjusted EBITDA of c. €190 million.

Simon Harrison, Chief Executive Officer of Princes, said, “This is an exciting prospect for Princes, and we are delighted that Newlat shares our confidence in the group’s strategic growth plans, brand strategy, operational excellence and people culture. The intended sale remains an ongoing process and further information will be shared in due course.”

Angelo Mastrolia, Chairman of Newlat, expressed great satisfaction with the acquisition’s success: “We are extremely proud to have agreed on this transaction, marking a crucial milestone in our growth strategy. Princes is a prestigious company, and integrating its operations with Newlat Food allows us to further solidify our position as a leader in the food sector.

“On closing of this acquisition, Newlat Food will become the largest food company listed on the Milan Stock Exchange, reinforcing its role as a key international player. The economic outlook of the new group gives us confidence in a future of sustainable growth, poised to create value for all stakeholders. The newly combined group will offer a broad range of high-quality products, addressing the needs of an increasingly demanding and diverse global market.

“This transaction enables us to enter new market segments and better serve our customers with an even more comprehensive, innovative, and unique product offering.

“The integration between Newlat Food and Princes Limited represents a significant opportunity for both companies to share expertise, resources, and synergies, contributing to a successful and mutually beneficial future. The mission of the new group remains to ensure continuous excellence and innovation, keeping customer satisfaction and sustainability at the forefront.”

This deal represents another successful transaction for Houlihan Lokey’s Consumer, Food & Retail team after recently supporting Bisca in a sale to Erhvervsinvest, Volac in a sale to Arla, HOFMANNs in a sale to Compass, and Dr. Gerard in a sale to Adam Foods. The transaction also exemplifies the strength of the firm’s network and extensive cross-border collaboration.

Houlihan Lokey served as the exclusive corporate finance advisor to Mitsubishi Corporation and assisted in negotiating key aspects of the transaction on its behalf.

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