- M&A
- November 16, 2023
- 3 minutes read
Food Giant Mars To Buy Hotel Chocolat For £534M
Mars, Incorporated, a privately-held American food products giant, has struck a deal to acquire Hotel Chocolat (LON: HOTC), an upscale…
Mars, Incorporated, a privately-held American food products giant, has struck a deal to acquire Hotel Chocolat (LON: HOTC), an upscale British chocolate manufacturer. Mars will pay £534mn ($663mn) in cash, a hefty 170% premium to Hotel Chocolat’s market value before the announcement.
The acquisition will end nearly four decades of independence for Hotel Chocolat and seven years of existence on the public markets. The company listed its shares on the London Stock Exchange in 2016 at a £214mn valuation.
Hotel Chocolat was founded in 1986 by entrepreneurs Angus Thirlwell and Peter Harris. The company began as a mint seller before pivoting to chocolates; it changed its name several times before settling on Hotel Chocolat in 2003. The company is famous for its luxury chocolates sold across over 100 stores, cafés, and restaurants.
Hotel Chocolat carved a lucrative niche in Britain; it reported £205mn in sales in its last fiscal year ending July 2023. However, revenue fell from £226mn in the previous year. The company posted a small £800k net loss in its last fiscal year compared to a £22mn pre-tax profit in the previous.
Mars sees something precious in Hotel Chocolat enough to offer nearly triple the company’s market value to take it private. Hotel Chocolat’s founders will earn windfalls of £144mn each from selling to Mars. Thirwell said he would invest 80% of the proceeds back into the company, while Harris will sell most of his shares and retire.
- Virginia-based Mars, Incorporated is a multinational food and confectionary company famous for its chocolate products like M&Ms, Snickers, and Twix. Adding Hotel Chocolat to the mix won’t hurt.
- With a reported $47bn in annual sales, Forbes ranks Mars as America’s fourth-largest privately-held company. Outside food and confectionary products, the company also has a multi-billion dollar pet care business spanning hospitals, diagnostic centres, and, of course, pet food.
Mars has secured a £375mn loan from U.S. bank JPMorgan Chase & Co to finance the acquisition. Barring regulatory hurdles, the deal is expected to close in early 2024.
