Newbury: BCMS advises on sale of Rainbow Dust Colours

Rainbow Dust Colours, a leading European food manufacturer, has been acquired by Real Good Food plc for in excess of £7 million.

Leading international M&A adviser BCMS acted as lead sale adviser to the vendors, with the transaction managed by its Haslingden, Lancs-based team.

Rainbow Dust Colours manufactures and distributes decoration glitters and coloured edibles for the cake-decorating and baking industry. Based at Preston, Lancashire, the company operates internationally, wholesaling to distributors, high street independents, supermarkets and large wholesalers, including many leading international consumer brands.

The acquirer, Real Good Food plc is a diversified food group listed on AIM and trading as five distinct operating companies: Napier Brown, Garrett Ingredients, Renshaw, R&W Scott, and Haydens Bakery. The Group, which declared annual revenues of £272.5m (March 2014), is a major distributor of sugar in the UK, and manufactures a wide range of baking ingredients, jams and sweet bakery products. Its portfolio of brands includes Whitworths Sugar, Renshaw and R&W Scott.

BCMS deal leader Vickie Hood, who managed the transaction, commented: “Companies active in the fast-moving consumer food products space and the food sector in general have experienced healthy levels of M&A activity over the past five years. This transaction, involving a plc acquirer, is a good example of larger groups targeting smaller niche speciality businesses for strategic acquisition.”

As part of its M&A advisory service BCMS profiled 184 organisations and engaged in early stage discussions with 35 companies that expressed a serious interest in the acquisition. Following negotiations with five parties the vendors accepted the proposal from Real Good Food plc.

Paul Johnson, corporate solicitor at Irwin Mitchell, provided legal advice to the vendors.